Graphic // studentaid.gov
By: Evelyn Kowalski
Staff-Writer
With threats to the Department of Education from President Donald Trump and others in his administration, students may have questions on their financial aid and FAFSA.
On March 20, President Trump announced that he is seeking to transfer the entire federal student loan portfolio out of the Department of Education to the Small Business Administration, but this will most likely require Congressional approval.
Student loan expert Mark Kantrowitz told CNET that the Treasury Department or the Internal Revenue Service would be the most likely destination for student loans programs since the FAFSA forms are already connected to the IRS system for tax return data.
During the pandemic, people with student loans were protected by “forbearance,” which meant that loan servicers could not report delinquent (missed or late) payments to credit bureaus. Now, servicers are reporting to credit bureaus again – so, if you have been more than 90 days late on a payment, you may see a significant drop in your credit score.
If you have been more than 270 days late on a payment, you will default on your loan, which means your entire balance and interest are due immediately. This can also damage your credit and cause you to lose eligibility for further student aid.
For borrowers currently behind on their payments, there are several options available to get back on track: making up missed payments, entering administrative forbearance, consolidating your loans, or adjusting your plan, including applying for an income-driven repayment plan, which can lower your monthly payment.
Finally, borrowers enrolled in the Saving for a Valuable Education (SAVE) repayment plan are currently in a state of forbearance, with payments expected to resume later in the year. If you are enrolled in SAVE, make sure you are still keeping an eye on updates from your loan servicer.
If you have questions about your financial aid status or need help figuring out your options, you can email [email protected], call 574-520-4357 or visit Admin 170 during business hours. You can also visit the Titan Success Center at Admin 146 to get help from a student retention specialist.
