CHARLOTTE, N.C. — Millions of Americans are about to start paying back on student loans that were paused for years due to the COVID-19 pandemic.
It's bringing up the question of what happens if you can't pay the loans back or choose not to make payments? First, you should know there's a 12-month period from Oct. 1 to Sept. 30, 2024.
Here's what the staff at money.com says about paying back federal student loans and the consequences of not making your payments.
During the 12-month period, missed payments will have "no negative impact" on credit scores. But that doesn't mean you can just ignore bills. For starters, interest will keep accruing and this can easily rack up hundreds, if not thousands, of dollars over the course of a year.
WCNC Charlotte is always asking "where's the money?" If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.
As for what happens when this period is over, heavier consequences begin. The missed payments will start hitting your credit score and if you don't pay them long enough debts can go into collections. At this point, money can be taken directly from your paycheck. That's right, wage garnishment is a possibility.
It's not likely, but it's also possible that the federal government can use loan debt to repossess assets like cars or a house to get the money.
Another aspect to remember too, is that there are other repayment forgiveness plans that you may not be able to take as much advantage of if you don't pay now. Those plans include options that will let go of the remaining balance after 10 years of on-time payments.
Contact Kia Murray at kmurray@wcnc.com and follow her on Facebook, X and Instagram.
WCNC Charlotte's Where's The Money series is all about leveling the playing in the Carolinas by helping others and breaking down barriers. WCNC Charlotte doesn't want our viewers to be taken advantage of, so we’re here to help. Watch previous stories where we ask the question “Where’s the Money” in the YouTube playlist below and subscribe to get updated when new videos are uploaded.
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