Changes to student loan repayment options

And student loan borrowers. Listen up. The start of the month brought significant changes to federal student loans from borrowing to repayment. Dr Sonia Lewis, known as the student loan doctor, joins us to break down what these changes really mean for you. Good morning. It's so good to have you here. So much for having me. I'm not even sure there are some people out there that appreciate how important this topic is right now, because this is just underway, right? Start of the month. Get all of these changes. I feel like they're gonna be people some kind of blindsided by what they're finding out. So let's kind of start with those in the process of paying back student loans and they need to know. So first thing first, about seven million people are feeling very confused and overwhelmed. Um, seven million people right now are receiving notices between their email and their mail saying you've got to get out of what's called the safe plan, and that was enacted through the Biden administration. And so this administration said you have 90 days. September 29th is what they're telling people that you've got to move it or lose it, right? Well, they're gonna lose it either way, but we don't want the repayment process to start without them. Okay, because there's still some options. You just need to know and figure out what the best one is. Yes. All right. So before we get into a little more of that, you mentioned the save plan. There are a few other plans that are affected that aren't available to borrowers anymore. The main one is the safe plan. That's completely done as of 2000 and 28. The ICR income contingent repayment and pay. I know all these. They're changing by 2000 and 28. But it's important to know that those are still available because they may be a little more affordable than the newer options coming up. Okay. All right. So if you need to choose a new repayment plan, and like you said, the clock's ticking on that. If this does apply to you, what do we need to do to be sure that we're making the right choice here that we're not making a costly mistake? Well, let's talk about existing borrowers. So 7 million people. Let's talk about those people first. So they're going to be proposed to go into what's called the R. A. P. Plan. That's the new plan by the Trump administration and then the tear standard plan. Now, the thing about the R. A. P. Plan is that it's going to be a little more affordable, about $50 less each month than the current plans. But the switch off is that it's gonna be an extra 10 years for repayment. The last time I checked, no one had an extra 10 years to repay on their loans. So we want people when they're choosing their options to take your time. Read slowly. I was just teaching a class last night, and the R. A. P. Plan is first. So you're like, Oh, that's going to save me the most money. But the fine print two things. 10 years of repayment extra, and that plan is not forgivable upon finishing repayment. The existing plan that people should look into is called I. B. R. Income based repayment. That plan is a congressional plan set through Congress and will forgive after 20 or 25 years. Okay, and it's amazing, really, when you do sit down and look at it and have expertise from someone like you, how something that seems like it's a little change right now, but makes a big, huge difference over time. Absolutely. All right, let's talk about public service loan forgiveness. You know, this has been a popular program helping teachers, government workers and whatnot. What's going on here? Any changes here? Okay, so no major changes. The good news is the Trump administration was told that they cannot make changes this year. They were trying to disqualify certain employers from being eligible. Um, so if you work with immigrants, for example, they were trying to say your job wasn't eligible, and Congress said that's not going to fly. So as of this year, everything is still the same. You should still do your paperwork. But in order to get credit for that plan, you have to choose another plan that we talked about, like an I. D. R. Plan. They go hand in hand. Okay, now let's talk about changes to borrowing the money in the first place, especially like parent plus loans. I'm familiar with some of those graduate students looking to borrow. What do we need to know? Okay, so the limits have changed. So for new borrowers, let's start there. Everyone knew as of July 1st, parents can only take out 65,000 per child where before it was unlimited number and graduate students can only take out up to $100,000 before it was an unlimited number. That's gonna make graduates and parents have to borrow more wisely and almost like chart out before they go into the school. Can I afford this? Can I finish the program? Yeah, that really does raise a lot a lot of new questions that you might not have had otherwise when you when you're trying to decide what to do. All right. So what would you say are some of the biggest misconceptions people have right now? And what can they do to protect themselves? First off, people have to log into student aid dot gov before the pandemic. People didn't go in at all, really. And then the pandemic came. People didn't go at all. So now go to student aid dot gov. Log in. We set your password. Don't worry, they've got you there. And then you just want to see if you're in default. You want to see if there's any alerts that comes up that that you need to pay attention to. The second thing is, make sure you know who your lender is because who your lender was last year may not be who it is this year. So please don't send a payment to Mahalia. And you're now with fellow, right? Yeah, that would be. I don't know how you get that money back. So that's the most important thing. And then the last thing is, make sure that you're checking your credit because a lot of lenders are escalating repayment, but it's not showing up on the website. So you may think you have until September 29th, but I have seen through thousands. People are in repayment now. And then when it hits your credit score after 90 days, miss 100 points lost. We cannot afford to lose 100 FICO points. Yeah, yeah, this is a big deal. A lot of information, but we appreciate you taking some time to share this. Yeah. And if you would like more information from Dr Sonia Lewis, you can head to our website Fox five Atlanta dot com. Go to the good day tab and click on today's viewer information link. There will be a lot of good information that you'll need right there.