Student loan payments restart this month. Loan forgiveness may help
The COVID-19 pause for borrowers to repay federal student loans has ended, meaning those borrowers will now start seeing bills.
Borrowers who set up their payments for automatic account debiting will have to reenroll into the auto-pay system.
This is what that means for the more than two million students and former students in Pennsylvania who currently have outstanding college loans and how to check if one qualifies for loan forgiveness.
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A joint report published in 2022 by the Keystone Research Center and the Pennsylvania Budget and Policy Center noted that total student loan debt has increased four times what was owed in 2003 — from $19 billion to an inflation-adjusted $76 billion.
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The U.S. Department of Education does offer several loan forgiveness pathways for borrowers who need relief, however:
Income-driven repayment forgiveness, for people who have income driven loans.
Public service loan forgiveness, for eligible government and nonprofit employees.
Teacher loan forgiveness, for eligible educators.
Total and permanent disability discharge, for people with disabilities so severe that they cannot work.
The Pennsylvania Higher Education Assistance Agency also provides links and additional information to both the public service loan forgiveness and teacher loan forgiveness options.
Federal Student Aid, an extension of the Department of Education, also provides several options including an online wizard to walk borrowers through choosing a payment that they are comfortable with.
There are an estimated 44 million federal student loan borrowers nationwide.
Overall, the student loan debt balance in the U.S. has increased by 66% over the past decade, totaling more than $1.77 trillion, according to the Federal Reserve.
The most recent data available from the 2020-2021 school year shows that more than half of bachelor’s degree students who attended public and private four-year schools graduated with student loans. These students left school with an average balance of $29,100 in education debt, according to the College Board.
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Who is behind on their student loan payments?
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and other executive orders helped relieve student borrowers of paying back loans throughout 2021, dramatically reducing the share of borrowers who were behind on their payments, according to Federal Reserve data. Among adults with student debt, 12% were behind on their payments in 2021, compared to 17% behind in fall of 2019.
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The Federal Reserve found that borrowers with less education and less educated parents were more likely to be behind on payments, along with those attending private for-profit colleges and universities.
This article originally appeared on Bucks County Courier Times: Student loan payments restart this month. Loan forgiveness may help
