OSHKOSH (NBC 26) — This week, collections on many federal student loans began for the first time since the pandemic, impacting alumni in Northeast Wisconsin.
- Federal student loan repayment collection began on May 5 for the first time since 2020.
- Graduated college students in Oshkosh say the repayment changes are confusing and hard to follow.
- The Wisconsin Coalition on Student Debt is a non-profit for student loan questions.
According to the U.S Department of Education, 42.7 million people have federal student loans, and only 38% are making regular payments.
Starting in March 2020, the DOE stopped collecting on defaulted loans– a pause that was continued by the Biden Administration.
On May 5, that pause was lifted.
Sydney Behlman is a University of Wisconsin Oshkosh alumni who hasn’t had to make payments on her student loans because of the pause.
She says she was grateful not to have to pay her loans during the pandemic.
“It was just helpful to not also have that to stress about.”
Now that the pause is over, however, Behlman says she’s worried and confused about her repayment plan.
“I’m kind of transitioning between jobs right now too, so as far as an income driven plan, I don't know what my income is going to be, even a month from now,” she says. “Not only do I not know when I'm going to start making these monthly payments, I don’t know when interest is going to start accruing again. It's all so confusing, and I've read a lot of contradicting things, so I'm not really sure.”
She’s not alone in her confusion.
Emillie Sieslewicz is also an alumni of UWO, but she’s currently pursuing her masters with UW-Madison.
She hasn’t had to make payments on her student loans yet because she’s still in school, but she says changes to the DOE have raised questions about her payment options.
“Everything is messy right now,” she says. “My plan was to do the public service forgiveness loan plan… now it’s up in the air if that is even going to exist in the end, so I was kind of banking on that being available to me. So it’s going to be interesting and yeah, I’m terrified… because like I said, there’s no way that I could pay back that much money.”
While there have been executive orders regarding the Public Service Loan Forgiveness Program, the DOE says the program is still available as of May 6.
Carole Trone is the executive director of the Wisconsin Coalition on Student Debt.
“We are focused on helping Wisconsin residents understand how to minimize student loan debt…and then be able to successfully manage and pay off any student loan debt,” she says.
Trone says lots of alumni and students are stressed over changes to financial aid and federal loans.
“The last couple years have not been easy to follow if you have student loan debt,” she says.
The coalition is a free resource for questions on student loans, and Trone encourages anyone with concerns to reach out.
The free hotline is 833-589-0750, or you can email the coalition at studentloanquestions@debtsmarts.org
Trone says it’s important for people to take action on their loan repayments.
“Don't avoid the issue any longer,” she says. “It may be that it seems overwhelming, but if you don't enter into a repayment plan, or if you don't communicate with your loan servicer, and you fall into that non-payment, that delinquent payment, or eventually a default payment situation, there's going to be a lot of really negative repercussions.”
While there have been many changes to federal student loans, Trone says that some changes are not set in stone.
“Our organization can help you figure out: is this a proposal, or is this something that's actually really affecting my situation,” she says.
