The Supreme Court's student loan decision is out. Here's what it means for you

Millions of Americans will soon have to start making payments on the full remainders of their student loans – now that the Supreme Court has struck down the Biden administration's attempt to forgive $400 billion in debt.

The court released its decision Friday, blocking President Joe Biden's loan forgiveness program, which would have allowed up to $20,000 in relief per borrower.

Here's what to know about student loan payments going forward.

When will student loan payments resume?

Student loan payments will be due starting in October, and interest will resume accruing on federal student loans starting September 1, according to the federal student aid website.

What does repayment resuming mean for borrowers?

The resumption of federal student loan repayment means borrowers who have left school or graduated over six months ago will have to start making payments towards their student loans again. Student loan payments have been paused and the interest rate on federal student loans has been set at 0% since March 13, 2020.

Associate director of financial services at the University of Louisville, Mike Abboud, said borrowers should visit the official federal student aid website and update their contact information so their loan servicer can reach them.

"That studentaid.gov website is the most powerful resource," Abboud said.

Some students may have different loan servicers than prior to the pandemic and repayment pause, so it's important to check your servicer information on the federal student aid website.

More: Supreme Court live updates: SCOTUS kills Biden plan to forgive student loan debt

How do I begin making payments?

If you graduated during the repayment pause and aren't sure where to start, visit the official federal student aid website. There you'll be able to find detailed information on how repayment works and identify your loan servicer – the company that will bill you each month and keep track of your repayment progress.

Abboud said while there are many sources offering information on student loan repayment online, borrowers should always consult government websites for the most accurate information.

"It really is best to educate yourself maybe at those other websites, but the guidance from the Department of Education, the White House and the loan servicers is truly what the student has to follow," he said.

What does repayment resuming mean for current students?

Students enrolled in college won't face repayment right away, but some might see interest begin to accrue on their loans.

Interest will begin accruing on student loans, including Federal Direct Unsubsidized Loans, on September 1. Students aren't required to begin making payments on unsubsidized loans until six months after they graduate or leave university, but interest begins accruing on these loans while students are in school. Accrued interest is capitalized, or added, to the principal value of the loan that they are responsible for paying back.

Abboud said students interested in making repayment easier when they graduate should consider starting to pay off their loans while in college. Though students aren't required to make payments during this time, he said even small payments of $50 each month can help students chip away at their loan balances or prevent interest from accruing.

How will the economy impact loan repayment?

Inflation and changing interest rates are not likely to directly impact individual federal student loans.

Federal student loans are disbursed with fixed interest rates, meaning interest rates on loans may vary depending on what year they were disbursed to a student, but they will not change, according to the federal student aid website.

The maximum amount a student can borrow in federal student loans has not changed since 2009. First-year undergraduates can borrow up to $5,500 per academic year. Second-year students can borrow up to $6,500, and students third-year or higher can borrow up to $7,500.

What should I do if I can't afford my student loan payments?

Abboud said individuals concerned about affording their payments should contact their loan servicer to discuss forbearance and income-driven repayment options.

"If an individual is still facing circumstances of hardship, the thing to do is not ignore the situation," he said.

According to the federal student aid website, if you don't make loan payments, your loan could default. Once a loan defaults, it will negatively impact your credit score. The government also has the right to garnish funds from an individual's wages and tax refunds in order to pay off their loans.

Reach reporter Kate Marijolovic at kmarijolovic@gannett.com or on Twitter @kmarijolovic.

This article originally appeared on Louisville Courier Journal: The Supreme Court student loan decision is out. What it means for you