HARLINGEN, Texas (ValleyCentral) — Friday, September 1, marks the end of the student loan payment pause.
Students and graduates will begin to acquire interest on their existing loans.
The interest increase affects students currently attending any college with unsubsidized loans and graduates with any type of federal student loan.
Denise Eliserio, the financial aid director at TSTC in Harlingen, says it is important to find who your lender is and start making phone calls.
“Reach out to lenders to create payment plans,” Eliserio said.
Subsidized loans only acquire interest after graduation while un-subsidized loans acquire interest immediately after being awarded.
Eliserio said the average interest rate on an undergraduate loan is 5.5%.
Setting up a payment plan is ideal, however, if you cannot pay your lender back, a forbearance plan might be an option.
A forbearance plan allows the lender to stop making payments under certain circumstances.
Eliserio said if you fail to contact your lender or set a payment plan within nine months or 275 days, your loan will be put into default.
“If a student comes back to school, they won’t be eligible for any Pell grants or student loans until they go back in good standing with their loans. It could affect their credit as well,” she said.
TSTC student Chipman Falls says scholarships are always an option for students.
“I’d recommend to any new and current students to apply for as many scholarships as they can. So that you know, they won’t have to go into that debt,” Falls said.
You can find who your lender is through the Federal Student Aid website or by calling the Federal Student Aid Information Center.