Student loan payments are likely to begin to resume in June. According to Education Secretary Miquel Cardona, since the emergency period is over, they are preparing borrowers to restart payments no later than June 30. It is important to be prepared for the restart of the payment process and make sure that your budget includes this expense.
The Supreme Court has heard oral arguments about the debt forgiveness plan and has yet to rule; however, they have indicated they will likely rule against the Biden administration and cancel the plan. Cardona says that they are prepared to resume payments 60 days after the Supreme Court rules but no later than June 30th. The dates aren’t completely clear because the 60 days will begin the earlier of June 30th or when the Court rules.
If you have student debt, that has been paused, your next steps are important. Start putting funds aside to cover your payment immediately. Payments have been paused for three years, so it will be an adjustment to rearrange your budget for this additional expense. Log into your account and make sure you have access. Update your password if you haven’t don’t so during the pause on payments. It is important to do this now so you will have access to information and updates as they become available, and you will have time to request new access if you don’t have your password available. Make sure your bank information is up to date for automatic payments. If you have changed accounts or banks, especially if your payments were automatically paid, you will have to update that information for the payments to process.
The Department of Education acknowledges that a “long on-ramp” is needed to get the process running again but don’t rely on further delays in the payment plans. Start planning for your loan payments now and if the Supreme Court rules your loan is forgiven you will have a little extra savings.
If you initially received notification that your loan forgiveness application was approved, follow the above steps and start budgeting now to be prepared for the payment restart.
