What to know about student loan payments resuming
For more than three years, millions of people who owe federal student debt haven't had to make payments. This fall, that will change.
What's happening: The payment pause on student loans — instituted by former President Trump in March 2020 — is coming to an end, with payment requirements resuming in October.
- Interest will once again start accruing on loans starting Sept. 1.
- The payment requirements will resume regardless of whether the U.S. Supreme Court upholds or strikes down President Biden's student loan forgiveness plan, in a ruling that could come as soon as Thursday.
Why it matters: 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.
- They can also have their wages garnished, or end up with ballooning balances that are even harder to pay off.
By the numbers: As of March, about 43.6 million people nationwide owed a collective $1.6 billion in federal student loan debt, according to the Department of Education.
- About 805,000 of those borrowers were in Washington, with the state's residents collectively owing $29 billion, the Education Department said.
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, according to Washington state's Office of the Student Loan Advocate. You should also update your contact information with your loan servicer.
- Don't know who your loan servicer is, or suspect it has changed? You can check by logging in and scrolling down to "My Loan Servicers" on your studentaid.gov account dashboard.
- Or, use the "Ask Aidan" virtual assistant feature to quickly find information.
Of note: State and federal officials are warning borrowers to watch out for scams, including from people who ask for fees or payment to help you sort out your student loans.
- They also say to be wary of offers of unexpected financial aid, which may include claims from telemarketers and emails using language like "pandemic grant" or "Biden loan forgiveness."
Pro tips: You can use studentaid.gov's loan simulator to find out if you are on the best loan repayment plan for you, the Washington student loan advocate office says.
- If you need to lower your monthly payment, you may want to apply for an Income-Driven Repayment Plan.
- Borrowers can also get out of default using the Fresh Start program.
What we're watching: The U.S. Supreme Court is expected to issue a ruling any time on President Biden's student loan relief plan. The decision will determine whether up to $20,000 of a student borrower's debt can be forgiven.
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