In late August of last year, President Joe Biden announced a plan to forgive or reduce the student debt of millions of borrowers.
The student loan forgiveness program would forgive up to $20,000 in student loan debt for up to 40 million borrowers with incomes under $125,000 (or less than $250,000 if married) in 2020 or 2021.
The plan went into effect, recording millions of requests.
However, shortly after it was blocked by a Court to later be evaluated by the Supreme Court, which has decided to annul it.
The highest court noted that the president did not have the authority to order his Secretary of Education to cancel such a large amount of consumer debt without authorization from Congress.
The Biden administration intended to cancel the student debt of millions of borrowers before payments resumed, paused for more than three years due to the coronavirus pandemic.
We share with you when student loan payments resume and what you need to know about it.
Find out the date on which student loan payments resume
Given the uncertainty about the future of the forgiveness plan, previously, the Biden administration offered a final extension of the payment pause, setting the last due date at 60 days after the Department of Education is allowed to implement the program or the dispute is resolved.
In addition, the debt ceiling law, passed by Congress and enacted by Biden, avoids another possible extension, canceling the payment pause and interest accrual 60 days after June 30, 2023.
Taking this into account, interest accrues again on September 1, while payments resume in October.
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In this regard, the Department of Education has said it will be in direct communication with borrowers and will increase its communication with student loan servicers before repayment resumes to share all the ins and outs of repayments.
However, student loan experts recommend that borrowers contact their servicer as soon as possible if they have questions about their loans, especially if they are interested in signing up for an income-based repayment plan.
In addition, borrowers must return to authorize automatic debits from their accounts to pay the monthly loan bill, even if they authorized the withdrawals before the pause began, CNN reports.