Student Loan Payments Pause to Expire Soon!
The federal student loan payments pause was meant to be temporary during the COVID-19 pandemic.
Legal experts predict that loan forgiveness will be thrown out by the Supreme Court, and borrowers could resume payments on their full balances as early as this summer. There is a big possibility that the student loan payments pause will be thrown out by the conservative majority court, and borrowers need to prepare for the resumption of student loan payments this summer.
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Are borrowers ready for the end of student loan payments pause?
Even with the possibility of the Biden administration extending the student loan payments pause, borrowers should prepare financially and mentally for the resumption of payments during a period of economic stress caused by high inflation and rising interest rates. According to the U.S. Department of Education, a historically large increase in federal student loan delinquency and defaults would possibly happen if the department can’t provide debt relief.
Several borrowers have mentioned that they will have to modify their lifestyle once the student loan payments pause ends. For instance, a 23-year-old hospital worker from Olympia, Washington, Martha Hernandez, said that she might have to work as a part-time waitress to repay her loans to avoid accumulating interest. She is entitled to $20,000 in loan forgiveness under the debt relief plan, and if implemented, her debt would drop down to $2,000, Yahoo reported.
Preparing for Student Loan Payments Pause Expiration
With student loan payments pause ending soon, the Consumer Finance Protection Bureau advises borrowers to update their contact information with their student loan servicer and StudentAid.gov profile. They should also research their options for repayment plans and watch out for scams related to pandemic relief packages. Scammers have been targeting student loan borrowers, so it’s important not to give out personal information or money to anyone you don’t know or trust.
READ ALSO: Student Loan Forgiveness Update: What to Expect After the National Emergencies End
