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Why did the Biden-era student loan plan end?
The Biden-era SAVE student loan plan ended its interest-free period due to legal challenges and legislative delays. These obstacles, including opposition from some lawmakers, have prevented the full implementation of the plan’s benefits, leading to the restart of interest charges and increased uncertainty for borrowers.
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What are the new challenges for student loan borrowers?
Borrowers now face higher monthly payments, increased risk of default, and potential wage garnishments. Many are also dealing with delays in debt relief processing and legal uncertainties, which make it harder to plan their finances and avoid financial hardship.
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How can borrowers avoid wage garnishment or credit damage?
To prevent wage garnishment or damage to your credit score, borrowers should act quickly by exploring repayment options, applying for income-driven repayment plans, or seeking deferment or forbearance if eligible. The Department of Education urges borrowers to contact their loan servicers immediately to discuss their options.
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What are the best repayment options now?
Currently, income-driven repayment plans are often the best choice for many borrowers, as they adjust monthly payments based on income and family size. Consolidation or refinancing might also be options, but it’s important to understand the implications before proceeding. Consulting with your loan servicer can help identify the most suitable plan for your situation.
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Will student loan forgiveness happen soon?
At this time, there is no clear timeline for widespread student loan forgiveness. Political and legal challenges continue to delay progress, and many borrowers remain in limbo. Staying informed and working with your loan servicer is crucial to navigating the current landscape.
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What should I do if I’m overwhelmed by student debt?
If student debt feels unmanageable, consider reaching out to a financial advisor or a student loan counselor. They can help you explore options like income-driven repayment, deferment, or even bankruptcy in some cases. Acting early can prevent further financial damage and help you regain control.