Student Loan Pause Given Final Extension Pending Court Decision

As the Biden Administration’s $10-20k student debt cancellation awaits a decision by the Supreme Court, payments on federal student loans remain suspended one final time. Payments were set to resume this January, but that was before the President’s move to forgive student debt for millions of Americans was stalled by legal challenges. Borrowers won’t have to make payments until 60 days after the Court delivers its final verdict or September 1st, whichever comes first.

Getting Ready for the End of the Student Loan Payment Moratorium

If you already got yourself ready to resume making payments, good for you! But if you didn’t, there are a number of thing you can work on before you make that first payment:

• Make sure your information is correct on both studentaid.gov and your loan servicer’s websites. .
• Get signed up for auto-debit so you’ll never miss a payment again! If you’re already enrolled, double check your bank info, especially if you’ve changed institutions since early 2020.
• Check out the different income-driven repayment plans available and be sure you’re still on the best plan for your situation. The Dept. of Ed.’s Loan Simulator is a great tool for evaluating the available plans.
• Consider your tax strategy for the new year. If you got married, changed jobs, or had other life events over the last couple of years, you could benefit from taking a look at your approach to income tax, which could also impact your student loan payments.
• If you did something like buy a house, you may have had to take your loans out of forbearance, but did you know you can get that money back? In many cases you can get those payments refunded by simply making a request to your loan servicer.

As always, student loans are both complex and specific to each borrower’s situation. If you have questions about any of the above, or about your situation specifically, reach out to your trusted student loan professional and get the new year off on the right foot!