For over a year, millions of Americans have experienced relief from their federal student loans. As part of pandemic-related relief policies, the government temporarily paused all federal student payments, according to BuzzFeed News.
- The repayment suspension is scheduled to end Sept. 30, reported CNBC. Repayments will begin Oct. 1.
- About 43 million Americans have federal student loans to repay, reported BuzzFeed News.
With loan suspension possibly coming to an end, borrowers must begin to prepare for repayments to resume, said CNBC.
Will debt relief end in September?
According to BuzzFeed News, student loan suspension could still be extended. However, this is highly uncertain since student loan forgiveness was notably left out of President Joe Biden’s proposed annual White House budget, reports Yahoo Finance.
- The Biden administration has begun to review federal student aid relief programs independently, said Yahoo Finance. A report will be released by the end of this week.
- According to CNBC, Biden has requested further information about the legality of forgiving student loan debt through executive orders. There are mixed reports as to whether Biden has the authority to do this, Yahoo Finance reports.
So far, student loan forgiveness has been missing from Biden’s proposed pandemic-relief packages, both the stimulus packages and the infrastructure packages, said CNBC.
5 steps to help you prepare for student loan payments to resume
- Borrowers can prepare by making sure lenders have their up-to-date contact information, especially if the borrower moved during the pandemic, CNBC reported. To do this, borrowers can usually log into their online accounts and update their information.
- Borrowers need to check their balances to find out who they owe and how much they owe, said CNBC.
- Next, borrowers can prepare for repayments by updating their monthly budget — especially if their financial situation or living arrangements changed during the pandemic, said CNBC. Updating monthly budgets to begin including the loan payments will allow for a smoother resumption of payments come Oct. 1.
- To get ahead of repayment, borrowers can begin building student debt back into their budget before October and setting aside the money into a savings account, according to CNBC.
- For those whose incomes changed during the pandemic, borrowers should consider enrolling in income-driven repayment plans. These plans will adjust monthly payments to remain affordable based on the individual’s income and family size, according to Federal Student Aid.
Creating a personalized payment plan will allow borrowers to transition smoothly into student loan repayment when loan suspension ends, said CNBC.