What’s the Story with Student Loans Loans? with Genar and Linsday from Savi
On this episode of Financially Naked: Stories from The Financial Gym, we're discussing a topic that's been flying under the radar since 2020: student loans. Joining Genar is Lindsay Clark, Chief Borrower Advocate at Savi, a platform designed to help borrowers navigate the student loan system. With the clock ticking to the end of the grace period in October, it's time to deep dive into the playbook of options available to borrowers.
Out of sight, out of mind? Not anymore. Unfortunately, the era of loan payments on pause is fading, but it's not all bad news! The government made huge improvements to the system, so borrowers are in a better position moving forward. Genar and Lindsay discuss the changes over the last few years, how to prepare for payments to start back up again, and tools you can use to handle your student loans.
Podcast Notes
During the administrative pause, there have been changes in loan providers. If you still need to, the most important thing to do first is check to see who your provider is.
This can be done at studentaid.gov
Once you know who your servicer is, log into that website to figure out when your first payment is due and the estimated amount.
From there, you can start to explore the different repayment options. There have been a lot of changes to the student loan system in the last few years, and new plans that can benefit many borrowers were rolled out.
Beware of scammers. Ensure any communication about your loans is directly from The Department of Education or your loan server. You can find a correspondence log on your studentaid.gov portal if you need clarification.
What options do borrowers have?
The Standard Plan bases your payments on the total amount of debt owed.
Income-Driven Repayment Plans (IDR) base payments on your income for the year using info from your tax returns.
The new SAVE Plan is a type of income-driven repayment plan. This new plan lowers payments for most borrowers and subsidizes interest. This means your loan balance will no longer increase due to capital interest starting next summer.
This will allow borrowers to pay off their loans and pay less along the way. After paying for a certain amount of time, the balance is forgiven. You can enroll in the new SAVE plan right now.
The SAVE plan is specifically for people who fall under a certain income level, but there is no income threshold for general Income-Driven Repayment plans, so it's in everyone's best interest to look into them as they can lower your monthly payments.
PSLF or Public Service Loan Forgiveness: The other program that saw improvements was the PSLF program. They expanded the requirements, making many more borrowers eligible than in the past.
This program is for folks who work at qualifying non-profit organizations or for the government. You may be eligible for forgiveness and closer to getting it than you think under the reformed program.
Pausing payments: If you can't afford your loan payment and the IDR options don't help, you can request a pause or forbearance. The interest will continue to grow, but they will pause the required payments to give you flexibility.
How can Savi help borrowers?
Savi is a social impact social tech startup in DC, founded by student loan experts, advocates, and borrowers. Their goal is to help borrowers understand their debt and help them navigate the repayment or forgiveness programs from start to finish.
There is so much information out there, and it can be hard to find a trusted source with clear information who can help you through this process. Savi combines tech and human elements to help borrowers achieve the best outcomes possible.
When you partner with Savi, you'll talk with a dedicated agent who knows you and will assist you throughout the process. They built a platform that will ask a few questions to help determine your options.
If you want, Savi can help you fill out the applications, get the signatures, and submit them on your behalf. For options like the PSLF program, many applications are rejected due to clerical errors. Savi helps eliminate that problem.
There's a tracking system in the Savi account. Savi monitors the application to ensure it receives the desired outcome and can promptly address any issues as soon as they come up.
Final Thoughts About Student Loans
Many people think this is a young person's problem, but 50+ is a growing demographic in the student loan world.
If you are feeling overwhelmed by your student loans, that's okay! A professional like the people at Savi or a Trainer at The Financial Gym can help.
If that's not an option, just take it one step at a time. Everyone has their own relationship with student loan debt, and you can work through it.
You should hear from your servicer soon, so keep an eye on your inbox for important messages.
There have been so many changes to loan repayment programs. Check to see if you qualify for any plans that can offer relief. Even if you didn't qualify in the past, you may now.
If you want to work with a Certified Financial Trainer to help navigate your finances, schedule a free warm-up call today! If you have any ideas or questions for the show, send an email to trainerpodcast@fingyms.com.
Resources
Connect with Savi
Website: https://financialgym.bysavi.com/