Student loans: What to know as collections resume | FOX 10 Phoenix

Well, millions of Americans will feel a financial hit they haven't felt in years student loan repayments But there is still time for Arizona borrowers to take action. I'm joined now by Jack Wallace with why refi Jack Thanks for being here and tell us about this upcoming deadline if you will Brian great to be with you with your viewers next week on Monday in particular Those borrowers that are in default and their federal student loans are gonna be in for a surprise They're gonna hear from the federal government And they're going to be subject to what we call the TOPS program, which is the Treasury Offset program to get them to repay their federal student loans. We have over 900,000 Federal student loan borrowers here in Arizona alone, but all about 33 billion dollars and that's about $36,000 on average for Arizona borrowers So it's important not to keep your head in the sand and ignore this stuff Forgiveness is not coming and we're going back to Retainment as normal. We've been in repayment since October of 2023 People started to be reported to the credit bureaus Earlier this year, which they hadn't been Since March of 2020 and now Those that are not only delinquent, but defaulted are going to be in for a new round of Treasury offset programs depending upon their status, so The most important thing to do is for the borrowers to communicate with their servicers If they don't know who their servicer is and they should know because if they get emails or snail mail From them since last, you know, October 2023. They should go to my ed debt D-e-v-t Dot ed go to find out if you're in the fall What are the various things that you can do to get out of the fall now if you're delinquent Which means you're a hundred or about 91 plus days delinquent, you know Five million people across the country that are in currently in the fall. We have about four million people that are in delinquency 91 plus days if you're delinquent and you don't want to get into that default bucket You should go to student aid a ID Gov and one if you haven't consolidated your federal student loans Consolidate them into one loan if you have consolidated your loan Sign up for an income driven repayment program Using the calculators that are on that website So that you get a manageable monthly payment so that you don't wind up in the fall So that's a possibility Jack if I have defaulted on one of these loans, I reach out to them What's it gonna look like as I move forward? Well, there's a couple things you can do You know if you have the ability to make payments now and some other reason cause you're Being in the fall you can get into the federal government's Rehabilitation program which permits you to make nine out of ten on time monthly payments And get back into good graces and if you get back into good graces You'll be deemed to be current and if you want to go back to school, you'll be able to qualify for Federal student aid whether it's a federal student loan or a Pell grant or some sort of federal student aid Jack cope at 19 the elephant in the room with these repayments. What has it been like the past few years? Well, it's you know, people have been spending money not saving it I mean if you look at you've got about 46 million people that own about 1.6 trillion dollars in student loan debt And what they've been doing is they've not been in repayment since March of 2020 So the graduates of 2020 21 22 23, you know, they never made a payment Wow, and so you've got a situation where people are not used to making payments To the Biden Harris administration Tell about how their loans were going to be forgiven at 10,000 or 20,000 for $50,000 the courts have ruled in four instances including the Supreme Court the Federal Court of Appeals and two District courts that Biden did not have the power to create these forgiveness programs It must be done through an act of Congress and then signed by the president And in fact, you may see a Brian as early as tomorrow with a house education And workforce committee gets to work. They're going to start talking about federal student loans and may create a new Repayment program going forward Jack as we wrap it up. Just what are your main takeaways real quick people need to pay attention to? don't put your head in the sand all your service there get online and Go to the website for the US Department of Education And get back into repayment because you signed up for a federal student loan not for a grant Jack Wallace with why refi Jack. Thanks for your time today Thanks, and good luck to your viewers. Thank you