According to the Biden administration, the standstill in federal student loan payments that has been in force since March 2020 may be coming to an end shortly.
Borrowers among the 45 million Americans who have student debt would almost certainly have to resume payments before the fall of this year, depending on the outcome of a Supreme Court lawsuit on student loan forgiveness.
When will payments on student loans resume?
While student loan payments have been suspended since March 2020, you may have to resume them this summer or fall. The precise timetable is dependent on when the Supreme Court rules on student loan relief. Payments on student loans will start 60 days after June 30, 2023, or 60 days after the Court’s judgment, whichever comes first.
In February, the Supreme Court heard oral arguments on Biden’s student loan forgiveness scheme, which advocated canceling up to $20,000 in federal student debt for qualifying borrowers. While the arguments lasted only one day, the Supreme Court’s ruling could take much longer.
The Education Department also said that it will notify borrowers before payments resume and will provide information on how to enroll in income-driven repayment programs or seek deferral or forbearance if they are experiencing financial hardship.
Read more: Biden administration: Student loan forgiveness may soon end
How to budget for student loan payments
Borrowers should prepare for the prospect of beginning payments this summer or fall by reviewing their loan amounts, interest rates, and repayment alternatives, according to student loan experts.
They also advise contacting their loan servicers to change their contact information and payment options, as well as to request any support that they may require.
Some borrowers may profit from refinancing their loans with private lenders if they can achieve lower interest rates or better conditions, but they should be aware of the risks, such as losing access to federal benefits and protections.