The U.S. Department of Education has officially announced that student loan payments will resume in October, ending the three-year-long pause that was implemented due to the pandemic.
Starting September 1st, interest will begin accruing on student loan debt. This adjustment may have financial implications for many families considering that around 40 million Americans have educational debt, and the average monthly bill is approximately $350.1
It is important to note that the recent law passed by Congress makes it almost certain payments will resume. Despite ongoing discussions and potential developments, it is unlikely payments will be paused again.
The verdict is still pending from the Supreme Court regarding President Biden's plan to cancel up to $20,000 in student debt for borrowers, which complicates matters. A decision is expected this month. Should loan forgiveness be approved, the Education Department plans to re-amortize the remaining debt amount to recalibrate monthly payments.1
We understand that the uncertainty surrounding these matters can be challenging. In the meantime, please contact your loan servicer to get the updated details on your student loan. How much do you still owe and what will your payment be? Your exact payment due date will be determined by the loan servicer as well.
Once you have these details, revisit your monthly cash inflows and outflows so you can make a plan. Use this time to explore the repayment options available to you.
If you have any questions or concerns, please do not hesitate to reach out to us. We are here to support you, and we may be able to provide some guidance through this process.
1. CNBC.com, June 20, 2023. “It’s official: Student loan payments will restart in October, Education Department says.”