Student loan payments resume for about 800K Washingtonians
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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.
- But Washington's Office of the Student Loan Advocate still recommends people make payments if they can, as interest will be accruing.
- Use this Axios explainer to figure out your student loan status before payments resume.
- Borrowers can also calculate their repayment with Federal Student Aid's loan simulator.
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.