After a 3-year pause on student debt payments, Starting on September 1, 2023, student loan interest will resume, and student debt payments will be due starting in October.
The Education Department has implemented various measures to help facilitate the transition back into repayment of the delayed student debt payments.
As student debt payments were to restart in the coming months, student loan balances were expected to increase as student loan interest will also restart.
Former President Donald Trump implemented a student debt payments pause with waived interest in March 2020 to provide financial relief to federal borrowers during the pandemic. President Joe Biden extended the student debt payments pause multiple times, but the latest extension until October will be the final one.
In June, Biden signed a law raising the debt ceiling, which codified the end of the student debt payments pause. This means that while a future president has the authority to implement a pause during a different national emergency, Biden cannot extend the pause again due to COVID-19.
A spokesperson from Education Department that there will be no leeway with the said provision and informed that they will notify borrowers before the continuation of student debt payments.
Abby Shafroth, co-director of Advocacy at the National Consumer Law Center | NCLC
Borrowers might have lost track of their student loan payments, while loan servicers might have lost track of borrowers who have changed names and address from the past 3 years. Borrowers must prepare for the student debt payments restart.
To prepare for the restart of the student debt payments, borrowers should log into StudentAid.gov to update their contact information. This way, borrowers could keep track of their loan servicers before the student debt payments restart. Abby Shafroth, co-director of Advocacy at the National Consumer Law Center, emphasizes the importance of this update, Barron’s reports.
To ensure accuracy and receive important notifications about restart of the student debt payments, it is recommended to update your contact information on both the government site and your servicer’s portal.
For those who can’t afford to pay their student debts, the loan simulator tool on studentaid.gov can assist borrowers to determine the best option for their situation.
READ MORE| Federal student-loan balances will start growing again in one month when interest returns
