There’s confusion and uncertainty for borrowers after recent changes to federal student loans. Some repayment plans aimed at lowering monthly payments are currently on pause.
There’s confusion and uncertainty for borrowers after recent changes to federal student loans.
Some repayment plans aimed at lowering monthly payments are currently on pause.
“Oh my god. I’ve got to get a job. I’ve got to find some way to pay these back,” Miles Murphy, a Central Connecticut State University senior, said.
For him, paying back his student loans is top of mind. The CCSU senior has about $40,000 in federal loans and will become one of more than 500,000 borrowers in Connecticut who have $18.6 billion in student loan debt.
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Murphy wants to keep monthly payments as low as possible after he graduates in May.
“Job market is pretty bad right now. I’m in the computer science field,” he said.
This comes as the Trump administration has blocked access to apply for income-driven repayment plans, which take into account a borrower’s current finances.
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Brian Marks, an economics lecturer at the University of New Haven, said this is the result of a recent federal court decision and likely means higher monthly payments for many borrowers.
“When you have an impact on people's personal budgets, like I said before, it will spill over into the general economy,” Marks said.
Staff at the Student Borrower Protection Center, a nonprofit focused on helping borrowers, say there are steps people should take. One is to keep detailed records.
“Take screenshots of all of your payment history, download all of your payment documents and keep that in your records,” Aissa Canchola Bañez, policy director with the Student Borrower Protection Center, said.
She also said to reach out to your student loan servicer if you’re eligible to get a forbearance or deferment on your loans if you’re unable to afford the monthly payments right now, but beware.
“They could add interest, which could ultimately increase a borrower's balance,” Bañez said.
These are steps Murphy said he’ll be keeping tabs on.
“Keep up-to-date with the news and see if there’s anything I can do to potentially mitigate the payments I’m going to have to make,” Murphy said.
The nonprofit also suggests people reach out to their members of Congress if they’re struggling to get answers from the Department of Education.
