Four Dates All Student Loan Borrowers Should Know in 2024
After the emotional roller coaster of student loan news in 2023, 2024 is shaping up to be another big year for federal student loan borrowers. Some of these student loan forgiveness initiatives are approaching key deadlines or end dates, while other programs are just getting started. Student loans are weighing on millions of Americans, but you have a few months to put yourself in the best position to deal with your problem.
Pension payments for a new employer
When: January 2024
With SECURE 2.0, you don’t have to choose between saving for retirement or paying off student loan debt. Starting this year, employers can contribute funds to their employees’ retirement accounts for the express purpose of helping pay off student debt. Employers can contribute up to $5,250 per year tax-free to qualified retirement plans to help reduce student loan balances. Check with your employer to make sure you can take advantage of this dual pension/student debt benefit.
Enhanced SAVE Redemption Benefits
When: July 2024
The Biden administration’s Savings for Valuable Education (SAVE) plan allows many borrowers to lower their monthly payments —some as low as $0. This program replaces the income-driven repayment plan known as Revised Pay As You Earn (REPAYE), which includes reduced monthly payments and greater income protection to meet basic needs.
If you want to take advantage of these benefits as soon as possible, you should sign up for SAVE before July.
Finishing student loan repayment on ramp
When: September 30, 2024
The Department of Education does not currently report missed or late payments or place loans in default or delinquency status. But for anyone taking advantage of this ramp-up period after pausing payments since March 2020, interest on the loan will resume accruing on September 30, with payments due in October.
Make sure you are ready to resume payments by contacting your service provider and updating your automatic debit registration if necessary. Your existing credit provider, not the government, will inform you of your outstanding balance and revised monthly payment amounts.
Once you know how much you’ll have to pay each month, start creating a budget as soon as possible. Take advantage of the preparation time you have and easily make your full monthly payment. This reduction might look like saving 25% of your loan payment the first month, then 50% the next, and so on. Whatever amount you have saved, consider putting it in a specific high-yield savings account so that it earns a small amount of interest until you have to use it. A reduction strategy allows you to draw funds from those few months of savings rather than suddenly from your income once payments resume with all the consequences.
Potentially: Biden’s new student loan forgiveness program
When: Possibly November 2024
After the Supreme Court ruled against President Joe Biden’s student loan forgiveness plan, the administration is expected to announce a new, tailored version of the plan sometime in 2024. And like the original plan , this scaled-down version is expected to face legal challenges. . All you can do now is stay tuned for more information and be prepared to act quickly if a forgiveness application is required.
What does this mean for you
Mark your calendar for these key 2024 dates. Stay up to date to ensure maximum benefit and preparedness. Unfortunately, the best course of action is to prepare for the worst : if student loan forgiveness doesn’t materialize, for example, it’s important to start taking steps now to get your repayment plan in order . Whatever the outcome of Biden’s forgiveness plan, you never know what else you might be eligible for. The FSA has a guide to check your eligibility for other government loan forgiveness programs. Check to see if you qualify for one of these student loan grants and seek help if you need guidance on student loan repayment or forgiveness programs. And if you’re (understandably!) tempted to just say “screw it,” here’s what will happen if you don’t pay off your student loans at all .