Rather than announce an end date, the government announced a timeframe for when the student loan payment pause will end. Bottom line: the earliest possible date is May 1 and the latest is August 30.
Why the confusion? It’s largely due to legal challenges brought against the Biden-Harris student loan forgiveness plan. The Supreme Court is set to settle the matter during the first half of 2023, and it could have a monumental impact on loan payments.
The Biden administration would prefer a ruling before ending the payment pause. As a result, they announced repayment will begin 60 days after the Court’s decision. However, if the Court declines to rule by June 30, 2023, payments will begin 60 days after that.
The payment pause has been extended eight times. The government declared more than one of those extensions be the final one.
But things are a bit different this time. President Biden recently announced plans to end the national emergency declared over the coronavirus pandemic. The move indicates his administration is pursuing a return to “normalcy”. While there could be another extension, it’s safer to assume that policy will carry over to student loans.
If the Court rules in favor of student loan forgiveness, approximately 13.3 million borrowers will have their loans completely wiped out. They’ll never reenter repayment.
If you owe less than $10,000 in student loans ($20,000 if you have a Pell Grant), you’re part of that group. Everyone else who qualifies should have lower monthly payments.
A ruling against loan forgiveness maintains the pre-pandemic status quo. Borrowers’ debts will not change, and all will reenter repayment later this year.
The best time to review your loans is right now. When payments restart, all sources of guidance and help will be overwhelmed and it will be difficult to connect with your loan servicer.
Don’t wait for payments to restart to act. It will be much easier to fix any problems with your loans now than after the pause ends. The following steps should prepare you for the restart: