Student-Loan Payments Are Set to Resume. How Should You Prepare?

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WSJ Your Money Briefing 8 min 3 speakers 8 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

ReliaQuest Advertiser 0:00
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J.R. Whalen 0:30
here's your money briefing for friday june 18th i'm jr whalen for the wall street journal people with student loans whose finances were hit by the pandemic haven't had to make monthly payments since march of last year but that payment suspension put in place by the government is set to expire in just a few months

When will federal student-loan payments resume and could the pause be extended?

Cheryl Winokur-Munk 0:53
If you haven't been paying all these months, you may actually not really know what you owe anymore. So the first thing you're really going to want to do is know what your payments are.
J.R. Whalen 1:02
WSJ contributor Cheryl Winokur-Munk has been our go-to resource for student loan matters throughout the pandemic. Coming up, she'll discuss some options to lessen the impact on your bottom line before you resume your monthly payments. That's after the break.
ReliaQuest Advertiser 1:15
This podcast is brought to you by ReliaQuest.

How can borrowers find out exactly how much they owe before payments restart?

ReliaQuest Advertiser 1:18
Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation.

Will recent graduates have to start payments immediately after the pause ends?

ReliaQuest Advertiser 1:23
ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
J.R. Whalen 1:53
The end of the student loan repayment suspension is near, and for many borrowers, that means having to work monthly loan payments back into their budget. But not everyone is back on solid financial footing.

What tools can federal borrowers use to estimate different repayment plans?

J.R. Whalen 2:04
WSJ contributor Cheryl Winokur-Munk has been looking into ways that borrowers can resume payments that won't break their bank account. And she's with us now. Cheryl, thanks for being here. Thanks for having me. So Cheryl, before we get into repayment strategies, we should note that even though the student loan forbearance period is currently scheduled to end on September 30th, it's been extended several times before. Are you hearing anything about another extension?

How should borrowers choose between lowering monthly payments and minimizing total interest?

Cheryl Winokur-Munk 2:27
So we haven't heard anything definitive yet, but just recently, the Secretary of Education suggested that there are continuing conversations about possibly extending the pause. So we're really not sure where this is going to go, but stay tuned.
J.R. Whalen 2:43
Okay, so assuming that September 30th date is going to hold, what's the first thing financial experts say that people should do to put themselves in position to resume making payments?
Cheryl Winokur-Munk 2:53
Well, if you haven't been paying all these months, you may actually not really know what you owe anymore. So the first thing you're really going to want to do is know what your payments are. You can easily find that by logging in to the federal student aid website at studentaid.gov if you have federal loans. For private loans, you're going to have to go to your servicer, your private lender or servicer for that. But for federal loans, you're going to go to studentaid.gov and you'll use the same login credentials that you used when you filled out your FAFSA, which is the free application for federal student aid. And you'll be able to see all your data and who your federal servicer is.

Can refinancing lower my student loan interest rate and what are the trade-offs?

J.R. Whalen 3:30
Now, how about recent grads? Does that go for them too? Will they have to begin making payments on September 30th?
Cheryl Winokur-Munk 3:36
Many recent grads will start having to make regular payments in November or December. So they really want to know how much they've borrowed so they can budget appropriately. And the reason to do it now is so that they're not all of a sudden they get to November or December when the payment is due.

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