DES MOINES, Iowa — The student loan payment pause is coming to an end on Friday, September 1st.
This comes after the United States Supreme Court ruled back in June that President Biden did not have the authority to cancel student loan debt. The federal pause on payments then had 60 days to come to an end.
During the pause, payments weren’t required and interest wasn’t accumulated for borrowers. Interest will begin accruing on Friday and payments will resume in October for borrowers across the country.
Drake University says that around 60% of students who obtain an undergraduate degree from its institution take out student loans. Drake’s Director of Financial Aid, Ryan Zantingh, says that this will impact both current and former students.
“Interest will begin on unsubsidized loans, so that’s one change for current students. For students no longer enrolled in school, they are going into repayment starting in October. Some borrowers may have been making payments before the pause, so they will just continue making payments. Students that graduated during the pause will begin to make payments for the first time,” says Zantingh.
Financial advisers, like Ryne Oller of West Des Moines’ Foster Group, say that the most important step right now for borrowers is to find and contact their student loan servicer.
Oller says, “In some cases, the servicer of that student loan may have changed, and so I’m guessing that many people have not logged in quite a while, so I’d say figure out how to log in, and get familiar with the website, and see what that required monthly payment is.”
Oller also says that borrowers can look into income-based plans to repay their loans. The Biden Administration announced last week another income-based plan known as the Saving on a Valuable Education (SAVE) Plan.
The Biden Administration says that this plan would provide the lowest monthly payment of any income-driven option.
To find out more information on student loan servicers, visit the United States Department of Education website here.