Student loan payments resume for Michigan's 1.4 million borrowers
It's been over three years since student loan borrowers have had to make payments, but the pandemic pause is over and millions of former students are now getting ready to start paying — some for the first time.
Why it matters: The resumption of student loan payments will result in real and often painful spending cuts for millions of Americans. Those cuts could also translate to a slowdown for the economy overall, Axios' Emily Peck writes.
Catch up quick: 26,980 Michigan borrowers are eligible to get their debt erased, according to the U.S. Department of Education.
- The department released state-by-state data in July showing who qualifies for automatic debt discharge.
- More than $1.2 billion of student debt could be forgiven for thousands of Michiganders.
Yes, but: Michigan has about 1.4 million total borrowers — the majority of whom will have to start making payments at some point beginning this month.
Zoom out: Nationally and in Michigan, borrowers between 35 and 49 years old owe the most in federal student loans.
- Women and Black borrowers also face higher loan burdens than their male and white counterparts.
What's next: Borrowers worried about not being able to make payments right away can apply for the new federal SAVE Plan, an income-driven repayment plan that calculates monthly loan payments based on income and family size.
- The Biden administration is also offering a year-long "on-ramp period" whereby borrowers won't be reported to the national credit rating agencies as being in default over missed payments.
Be smart: Use this Axios explainer to figure out your student loan status.
- Borrowers can also calculate their repayment with Federal Student Aid's loan simulator.
💭 Sam's thought bubble: I graduated in May 2020 so I've never had to pay my student loans — and this just doesn't feel right.
- The $301.03 I apparently owe each month would be much more useful going to a local business or my savings account, but alas.
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