6 Steps Borrowers Can Take to Protect Themselves Amidst Uncertainty

Recent changes to federal loan programs and student loan management may feel overwhelming, but there are simple ways to safeguard your financial wellbeing and get ready for what's next.

Many experts agree: don’t make drastic changes until there’s more clarity on what policy and programmatic shifts mean for you. Instead, you should stay informed, continue to make regular payments, and start taking steps to protect yourself and your student loans.

6 Steps to Protect and Prepare Yourself as a Student Borrower

1. Update your contact information to stay informed

One of the first things you can do is make sure StudentAid.gov and your loan servicers have accurate contact information for you. Outdated contact info can mean missing important communication regarding updates or changes to your loan repayment plan.

Log into each of your accounts and verify or update your address, email, and phone number to make sure communication about your student loans reaches you. And while you’re at it, update your passwords to keep your account secure.

2. Document your payments and loan details

Keeping records of your loan payments and loan details is good practice at any time, but it’s especially important when federal student loan management is undergoing extensive changes. You’ll want to document your loan amount, loan status, interest rates, payment terms, and repayment history by taking screenshots of your StudentAid dashboard and downloading your raw data file from StudentAid.gov. Having a comprehensive archive showing proof of payment and your loan details can help you resolve disputes quickly if information is lost or there are discrepancies in federal records.

3. Budget for higher monthly payments

With the future of repayment plans uncertain, you should prepare for the possibility of higher monthly payments. Some borrowers are already seeing increases and some projections suggest that borrowers could see an average increase of $200 per month. The best thing you can do is start budgeting. Identify areas where you can trim expenses and start setting aside funds to cover potential increases. Consider using the 50-30-20 rule or other budgeting guidelines to help you stay on track.

4. Seek support from your community

There’s no better time to lean on your community than during seasons of unease. Though we acknowledge the shame sometimes associated with student loan debt, know that there is nothing wrong with seeking support.

Loved ones and other members of your community can help contribute toward your student loans with Paidly. Use our app to let loved ones contribute directly toward your loans – no need to transfer funds or share loan details.

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5. Ask for student loan assistance from your employer

Your employer can also help pay down your loans through an Employer Student Loan Repayment benefit. Like a 401k or 529 plan contribution, employers can make payments directly toward your loans through Paidly, taking some of the pressure off your shoulders.

Not sure if your employer offers a student loan repayment benefit? Contact your HR department and ask if student loan assistance is available or something they’re planning to implement. If they don’t offer assistance yet, make a case for the benefit using our step-by-step guide.

6. Consider refinancing for lower interest rates

In addition to budgeting and receiving support, it’s a good time to see if you can refinance for more favorable loan terms. Refinancing with a private lender can lead to lower interest rates and lower monthly payments while providing more stability and customer support than federal loans.

It’s important to thoroughly research your options and compare the benefits of refinancing. Many trusted lenders like Earnest offer competitive rates to help student borrowers refinance their federal loans into private ones. Try a refinancing calculator to see if moving to a private lender makes sense for you.

Proactive steps help you maintain control amidst uncertainty

The future of federal student loans may be unclear, but you can maintain control of your financial situation by taking proactive steps. From staying informed and keeping good records to seeking outside support and refinancing, every step you take now better prepares you for whatever lies ahead.