Navigating New Waters: What You Need to Know About the Changing Student Loan Repayment System

Updated: Aug 7

Through our Eta University, we’re committed to equipping our members and the communities we serve with the tools to thrive spiritually, personally, and financially. With federal student loan repayment going through major changes, it’s more important than ever that you stay informed, especially as many of our members and their families carry the weight of student debt.

What’s Changing?

The student loan system is undergoing a transformation under the “Fresh Start” and SAVE Plan initiatives introduced by the Department of Education. These changes are designed to help borrowers, especially those with lower incomes or past delinquencies, find relief and a pathway to financial freedom.

Highlights You Should Know:

1. SAVE Plan: A More Generous Repayment Option

The new Saving on a Valuable Education (SAVE) plan replaces the old REPAYE plan. It offers:

$0 monthly payments for single borrowers earning under $32,800/year.
Cutting payments in half for others in income-driven repayment.
No interest growth if your monthly payment doesn’t cover the full interest.

✨ Eta Pi Insight: If you or someone you know qualifies, this could significantly reduce the financial pressure each month, freeing up space for tithes, savings, and service.

2. Loan Forgiveness Gets Faster

Under the SAVE plan, those who took out smaller loan amounts (like $12,000 or less) may qualify for forgiveness after just 10 years of payments. This is especially helpful for graduates from community colleges and certificate programs.

✨ Eta Pi Insight: This may be a game-changer for many Black and Brown borrowers who often take on smaller but harder-to-manage debt.

3. Delinquencies Can Be Erased...Temporarily

Borrowers who defaulted on their federal loans before the pandemic can benefit from the Fresh Start program, which allows them to rehabilitate their loans and get back into good standing.

✨ Eta Pi Insight: But act fast! Fresh Start is temporary, and the window to opt in is closing.

4. Payment Restart & Credit Reporting

As of fall 2024, interest has resumed, and monthly payments are expected again. However, if you miss a payment before September 2024, it won't hurt your credit. After that, delinquencies will be reported again.

✨ Eta Pi Insight: Set a calendar alert, automate your payments if possible, and don’t wait until the last minute.

What Should You Do Now?

Log into your Federal Student Aid account and verify your servicer (some have changed!).
Consider enrolling in the SAVE plan if you qualify.
Check your eligibility for Fresh Start if you’ve defaulted in the past.
Set up payment reminders or automation before credit reporting resumes in September.

Eta Alpha Pi Encouragement:

As Kingdom-minded women, we believe in financial stewardship and preparing our sisters and our communities to lead with wisdom. Student loans may be part of your journey, but they don’t define your destination. Stay informed. Stay organized. And lean on your Eta Pi family if you need guidance or prayer during this transition.

We’ll continue to post updates and tools from Eta University to help you navigate personal finance, scholarship planning, and beyond.

Source: https://shorturl.at/D88zY