Jun 30, 2023 - COVID

What to know about Georgia student loan payments resuming

Illustration of a college pennant with George Washington on it and the letters "IOU"

Illustration: Sarah Grillo/Axios

Tens of millions of borrowers will resume monthly student loan payments without any debt relief after the Supreme Court ruled on Friday that President Biden's loan forgiveness plan is unconstitutional.

Why it matters: Borrowers who qualified for the relief plan would have been forgiven for loans up to $10,000 for individual borrowers who make under $125,000 per year or $20,000 for Pell Grant recipients.

Catch up quick: The relief program was announced in August but was blocked by court orders and since November has been on hold.

  • Meanwhile, a payment pause on student loans — instituted by former President Trump in March 2020, the first of many pauses during the COVID-19 pandemic — is winding down, with payment requirements resuming in October.
  • Interest will once again start accruing on loans starting Sept. 1.
  • The payment requirements would have resumed regardless of whether the U.S. Supreme Court upheld or struck down President Biden's student loan forgiveness plan.

Threat level: If borrowers don't resume payments in October, they risk going into default, which can damage their credit rating and hurt their ability to borrow in the future, Axios Seattle's Melissa Santos writes.

  • They can also have their wages garnished, or end up with ballooning balances that are even harder to pay off.

Zoom in: As of March, about 1.7 million borrowers in Georgia had federal student loan debt, collectively owing $71 billion, according to the Department of Education. That's one of the highest amounts in the U.S.

  • 1.1 million of those borrowers are between the ages of 25 and 49, according to the federal agency's data.

Be smart: For most borrowers, auto-debit payments will not restart automatically, Axios' Sareen Habeshian reports. Most people will need to opt-in to confirm their auto-debit enrollment before payments restart.

  • To avoid missing billing statements or due dates, borrowers should log into the Education Department's website, studentaid.gov, and make sure their contact information is up to date.
  • You should also update your contact information with your loan servicer.

Pro tips: You can use studentaid.gov's loan simulator to find out if you are on the best loan repayment plan for you.

What we're watching: Advocates for student debt relief like the NAACP's Youth and Challenge Division plan to march on the Supreme Court to protest the ruling Friday.

  • Biden is expected to outline other measures later Friday, CNN reports.
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