Student loans are at the top of people's minds across the nation and locally.
"College is expensive, and it seems like it's only getting more expensive," said James Wifull, a second-year student at Cal Poly.
That's the sentiment every student KSBY spoke with today shared — and the expense means some have had to turn to student loans.
"Currently I don't [have student loans], but I think next year I'm going to because the total cost is like 40,000 dollars and I don't have that," said Zion Stallworth, a freshman at Cal Poly.
For the 2023-2024 school year, over 3,000 students at Cal Poly received federal student loans, about 14% of the student population.
When it comes to repaying those student loans, some new policies are about to go into effect.
The Trump administration announced this week that beginning May 5, it will resume collection on defaulted student loan payments.
To be considered in default, payments on student loans must be at least 270 days late.
"It's really important that borrowers pay attention to their loans and know exactly when their payments are due," said Scott Buchanan, the executive director of Student Loan Servicing Alliance. "Make those payments on time, but also realize that if they get into financial distress, it's critically important to reach out to your loan servicer to avoid default."
He says that, unlike an overdue credit card payment, there are quite a few options for people whose student loans are in danger of going into default.
"A lot of those options include things like income-driven repayment plans, we have graduated repayment plans, extended repayment plans," said Buchanan. "If you've lost your job, for example, we have an economic hardship deferment. That means you can postpone payment for some period of time, and that means you won't go into delinquent and if you don't go into delinquent, you don't run the risk of default."
The Department of Education expects that there could be almost 10 million borrowers in default in a few months.
For those in default, you can expect an email from the Office of Federal Student Aid, informing you of your options.
You can enroll in a monthly payment program, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
If you do none of those, then you run the risk of wage garnishment, which means some of your paycheck will be withheld and applied towards paying off your loans.
"If you have concerns, if you're feeling distressed or you have a financial challenge that's going on, know there are options," said Buchanan. "There are a lot of things we can do to help you, and we can assist you in reaching out to your servicer. We are here to help you navigate through that."
TheStudent Loan Servicing Allianceis free and could be a good starting place to look for help with loan repayment.
For more information on where you stand on your loans, click here!
