Sep 29, 2023 - News

Student loan payments resume for about 800K Washingtonians

Outstanding federal student loans in Washington
Data: https://studentaid.gov/data-center/student/portfolio; Chart: Deena Zaidi/Axios Visuals

In a few days, many Seattleites will be required to make student loan payments for the first time since 2020.

Driving the news: Federal student loan payments become due again in October, affecting about 800,000 Washington residents with student debt.

Why it matters: The three-year pause on student loan payments gave borrowers a reprieve during the pandemic. But they now must factor those payments into their monthly budget — and some may struggle to do so.

State of play: About 804,000 people in Washington owed federal student loan debt as of June 30, according to the U.S. Department of Education. The average owed was about $36,000.

  • In July, President Biden announced that some borrowers who have been paying for decades — including about 16,000 in Washington — would have their debt forgiven.
  • But that still leaves an estimated 788,000 Washington residents who will have to make payments again starting next week.

Of note: Biden's earlier student loan forgiveness plan, which would have relieved up to $20,000 in federal debt per borrower, was struck down by the Supreme Court in June.

Zoom in: People in their mid-20s to mid-30s make up the largest share of Washington residents with federal student loan debt, comprising more than one-third of borrowers, according to Education Department data.

  • As of June 30, about 280,000 Washington residents ages 25 to 34 had outstanding loans, owing a total of $9 billion.

Yes, but: Slightly older Washingtonians owed more money.

  • About 270,000 Washington borrowers between 35 and 49 had a total of $12 billion in federal student loan debt.

Be smart: Late payments won't be reported to credit bureaus or negatively affect your credit score through Sept. 30, 2024.

Plus: Borrowers can sign up for a new income-driven repayment plan, the SAVE plan, which the White House estimates will save the typical borrower about $1,000 per year.

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