NewsPalm Beach County

Actions

Student loan repayments could start as soon as this summer

student loans
Posted at 6:32 PM, May 31, 2023
and last updated 2023-05-31 18:32:42-04

PALM BEACH COUNTY, Fla. — For those with student loan debts the coming days and weeks could come with added stress.

"It's been a long journey. I got a couple more years on it to go," Taylor Hallagan said.

She's been paying her student loans since 2011.

"I'm definitely glad we had a break between having to pay it," she said. "I feel prepared to be paying it."

Taylor Hallagan student loans May 31 2023.jpg
Taylor Hallagan said she's prepared to pay her student loans if payments begin this summer.

Restarting student loan payments could soon become reality. Some payments have been on hold since 2020. But the deal over the nation's debt limit could bring a restart in late August when the payment freeze ends.

"The main concern is that this would prevent President Biden from doing an indefinite extension to the payment pause and interest waiver if the U.S. Department of Education loses the U.S. Supreme court case," college payment expert Kevin Kantrowitz said.

Supreme Court ruling on student loan debt relief expected in June

Scripps News

Supreme Court ruling on student loan debt relief expected in June

Stephen Graddick IV, Emily Grossberg
3:58 PM, May 31, 2023

Kantrowitz said the payment pause and interest waiver basically set the interest rate at zero. In September, new interest will begin accruing.

"I'm expecting to see an increase in delinquencies on the federal student loans for the first few months ," he said. "But when things will settle down, borrowers will get back to paying their student loans."

Kantrowitz said for the 42 months the loans were in hibernation, he said, it cost the federal government billions in interest payments.

College payment expert Kevin Kantrowitz May 31 2023.jpg
College payment expert Kevin Kantrowitz forsees late payments initially once the freeze ends.

Hallagan said she's ready.

"I've just been saving in a specific account, so I'm prepared for this," she said.

President Biden's student loan forgiveness plan is in the hands of the U.S. Supreme Court. A decision by the Supreme Court is expected before the end of June.