Student loan repayments start soon. Are you prepared?
More than 40 million Americans will have to pay federal students for the first time in three years.
After three years of extensions, the pandemic-era student loan freeze is likely to come to an end in late August. If you’re one of the hundreds of thousands of Massachusetts residents with federal student loan debt, we want to know: Are you ready to start making payments again?
More than 40 million Americans have had a reprieve from making payments on their federal student loans since March 2020 when former President Donald Trump ordered a payment pause as COVID relief. President Joe Biden continued the pause when he took office and has extended it six times. But thanks to the terms of the debt ceiling deal approved by Congress earlier this month, another extension isn’t on the table.
Many borrowers are waiting eagerly to see if the Supreme Court will allow President Joe Biden to move forward with his student loan forgiveness plan that would eliminate $10,000 of debt per borrower and $20,000 for Pell Grant recipients. More than 800,000 people in Massachusetts would be eligible for relief under Biden’s proposal, but the plan has been stalled by legal challenges.
Regardless of what the Supreme Court decides, payments will resume at the end of the summer, and many borrowers report that they aren’t financially prepared to start repayment.
Several readers shared with Boston.com during the height of the pandemic that their finances were strained because of unemployment, higher cost of living, and debt. Despite this, more than 2,000 readers said they weren’t in favor of student loan forgiveness.
“Loan forgiveness is the wrong tactic here as it teaches people that their mistakes can be washed away by government and, even worse, it falls on the shoulders of others who made better choices or took responsibility for their debt to implement. It’s a sad world, to me, when this is a real path that’s even being considered,” said Anna from Waltham.
Now that the end of the repayment freeze is finally around the corner, how are you thinking about your student debt? Have you been making payments during the freeze? Are you adjusting your budget to include your monthly payments? Or, are you just keeping your fingers crossed for debt relief?
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