Borrowers of federal student loans have been enjoying no payments and no interest accumulating on their student loans. But, three years (and nine extensions) later, that’s coming to an end once and for all. Part of the debt ceiling agreement last week indicated that there will be no further extensions to the payment pause.
The details of what is written in the debt ceiling agreement points to the pause stopping at the end of August. So, interest will likely start accruing on August 30th and student loan payments will be due in September.
Federal student loan forgiveness of up to $20,000 per federal borrower is still with the Supreme Court. A decision is expected from them either this month or in July. If this forgiveness happens, it would eliminate approximately $300 billion of the $1.7 trillion in total student loan debt.
What do you do if you have federal student loans?? Many borrowers are still in denial that payments will be required in just a few months. The first step is to realize that it is actually happening this time. Contact your student loan servicer and determine when your first payment will be due. Plan your budget so you ensure you’ll have no problems making your scheduled payments.
The student loan payments shown in the post are the average after graduating. The monthly payment can of course vary based on how much debt someone has, their interest rate, and so on.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Vivi & Shane
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