For the first time since 2020, students must begin to pay their federal student loans.
This is what you need to know.
Three years after President Donald Trump’s made public the forbearance of student loan payments and interest in 2020 as a relief to the economic situation created by the Covid pandemic, the mandatory payment of these loans now takes effect. The payment will depend on the clauses of each lender.
What should you do?
Call the loan servicer to identify the loan amount, monthly payment and payment start date. If you recently graduated, your payment start date may be forward in time. If you do not know your loan servicer, access the Federal Student Aid Loan website as some loans have been transferred to new loan servicers.
What if you can't pay your loan?
In an effort to alleviate the impact on students, President Biden's administration, has created a one-year waiver program for federal student loans where late or missing loan payments will not be reported to the credit bureau. Still, it is recommended to pay what you can, as interest will continue to accrue.
Will there be forgiveness for student loans?
In late June 2023, the Supreme Court denied Biden's plan to forgive up to $20,000 of student loans, and the administration has since continued to map out a new forgiveness plan. The administration has announced that it will prioritize certain groups of borrowers.
Is there hope for student loan forgiveness?
There are still ways to obtain forgiveness, including PSLF, which can erase debt after 10 years in a public service career, and IDR, which forgives any remaining balance after 20 to 25 years of payments.