When will student loan payments start again? What to know as repayments loom

Olivier Douliery/AFP/TNS

Student loan payments have been frozen for over three years, but that will likely change soon.

The moratorium on student loan payments, which started in March 2020, is set to expire in June — either with a Supreme Court ruling, a debt ceiling deal or the Biden administration’s June 30 deadline, whichever comes first.

With the end of the freeze nearing, here’s what borrower’s should know about the coming months and resuming payments on their student loans.

Ending the student loan repayment freeze

President Joe Biden announced the eighth extension of the student loan repayment moratorium in November as his student loan relief plan remained tangled in legal limbo. Payments were set to be paused until no later than June 30.

As that deadline approaches, there are three likely ways the student loan repayment freeze will end. Here’s a breakdown of each possibility:

  • A Supreme Court ruling: The Supreme Court heard arguments for Biden’s student loan forgiveness plan in February, and the Department of Education said it’s hopeful there will be a ruling on its legality by the end of June. Once the ruling is released, the pause on payments could end and relief could begin. If Biden’s proposal is overturned though, things could be more complicated.

  • Debt ceiling deal: A potential deal that raises the debt ceiling and cuts spending includes a provision that would end the student loan repayment freeze — and would prevent Biden from reinstating or extending the pause. This follows the same timeline outlined by Biden and the Department of Education, with the freeze ending June 30 and payments resuming 60 days later.

  • Biden’s deadline: Without a debt ceiling deal provision or a Supreme Court ruling, the pause on payments could end June 30 with Biden’s deadline that was set in November.

When will student loan payments resume

The Department of Education has officially said that payments will resume 60 days after the payment pause ends.

But the timeline for restarting student loan repayment is dependent on how the payment pause ends, and department officials said payments are expected to resume in September, according to Politico.

The department said it will notify borrowers “directly before payments resume” — at least 21 days before their first payment is due.

Preparing to pay back student loans

Although the exact date that borrowers will have to begin making payments on their student loans is still unknown, there are steps borrowers can take to prepare themselves.

  • Check with your loan servicer to see if your interest rate has changed, for questions about auto-debit payments and to get an estimate of your monthly payment and due date. Make sure you leave yourself time to get these details ironed out, especially because officials anticipate longer wait times for customer service help.

  • Use the “Loan Simulator” at studentaid.gov to explore repayment options and find a suitable plan.

  • Consider an income-driven repayment plan, which may make paying your student loans more feasible.

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