Student Loan Forgiveness & Payment Pause
With President Biden’s loan forgiveness plan heading to the Supreme Court, student loan lenders have a lot of questions. There are still many different potential outcomes, but a lot will be determined in the coming months.
Student Loan Forgiveness & Payment Pause
Let’s take a look at several student loan-related questions.
Will the student loan payment pause end this year?
I believe it is coming to an end, whether that be later this year or early 2024. I could see a scenario where, if the court rules against the student debt relief program, the Biden administration pushes for the loan payment pause to be extended to afford some relief to borrowers and allow them a bit longer to get a plan in place. But it seems that one way or another this general pause will be coming to an end sooner than later.
When do you expect payments to resume?
I could see the administration trying to allow more time for borrowers, so perhaps they can push it into early 2024 to see how the economy as a whole responds. I think the earliest we'd see payments in general resume would be fall of 2023.
What can student loan borrowers do now?
I would suggest they work with the Federal Student Aid program now, while still in the midst of the pause, to see if they would be eligible for deferment or forbearance if and when the general pause is lifted.
If you’re in a short-term financial bind, you may qualify for a deferment or a forbearance. With either of these options, you can temporarily suspend your payments.
There is a lot to be gained from our free general financial aid advice, but it’s also a very individual process. If you have remaining financial aid questions, email us to discuss more or book an individual session.