July 5th, 2023 7:00am PDT
(PenniesToSave.com) – It has been over three years since the approval of the student loan moratorium. In March 2020, repayment and interest accumulation on federal student loan debts came to a temporary halt. Implemented during the Trump administration, this moratorium has seen eight extensions within the past three years. The most recent extension was granted by President Biden in November 2022.
The freeze extension was decided as President Biden’s full student loan forgiveness program faced legal challenges. In an agreement with House Republican leaders to raise the debt ceiling, no more extensions will be granted. Borrowers should now get ready to resume loan payments, as the Supreme Court has ruled that President Biden lacked the authority for widespread debt relief.
The Federal Student Aid website states that borrowers will receive advance notice before their payments resume, which is anticipated to happen in October 2023. It’s crucial to remember that interest will begin accruing again starting from September 1, 2023.
When Will Payments Be Expected?
For those wondering about the resumption of student loan payments, it’s important to note that there will be no more extensions to the moratorium. This was determined as part of a debt ceiling agreement between the White House and Republican leaders in the House of Representatives. As mentioned on the Federal Student Aid website, “Congress has recently passed legislation prohibiting any further extensions of the payment pause.”
President Biden was able to maintain his comprehensive federal student loan forgiveness program, which was pending a Supreme Court decision, through this agreement. However, the pause on payments and interest has been assigned a specific end date.
What Can Be Done to Prepare?
The Federal Student Aid website states that borrowers will receive advance notice before their loan payments resume in October 2023. It is crucial to understand that interest will begin accruing again on September 1, 2023.
If you’re wondering when student loan payments will resume, it’s important to note that there won’t be any more extensions to the moratorium. This decision was reached as part of a debt ceiling agreement between the White House and the Republican leadership in the House of Representatives. The Federal Student Aid website explicitly states that Congress has passed legislation preventing any further prolongation of the payment pause.
By reaching this agreement, President Biden successfully protected his comprehensive federal student loan forgiveness program, which was awaiting a Supreme Court decision. However, a specific end date was established for the temporary suspension of payments and interest.
Lastly, it is crucial to allocate money towards your upcoming loan payments if you haven’t already started budgeting. This strategic step will help you avoid any unexpected surprises and prevent the need to suddenly cut back on vital expenses when October rolls around. By proactively saving for your loan payments, you can confidently manage your financial responsibilities without sacrificing essential needs.