Next month, for the first time since March 2020, borrowers with federal student loans will make payments on those loans. Interest began to accrue a month earlier, on Sept. 1.
Over the last three-plus years, lawmakers have proposed several plans to try to save borrowers money. In August 2022, the Biden administration said it would cancel up to $400 billion in student loans, but the U.S. Supreme Court ruled this summer that the president overstepped his authority.
"It's been complicated and confusing and unreliable to plan things out to a certain point, because I don't know -- should I plan to have these monthly payments kick in?," Dylan Jeffreys, a 2021 Stephen F. Austin State University graduate, said. "Is the place that I'm about to move going to be affordable for me still, if these payments do kick in at some point and this plan falls through?"
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The Biden administration in late August announced the SAVE plan for borrowers, which it touted as "the most affordable student loan plan ever."
The plan allows borrowers whose original principal balances were $12,000 or less to receive forgiveness after 120 payments.
While the pause left some borrowers with a sense of uncertainty, Paul Goebel, the founder and director of the Student Money Management Center at the University of North Texas, said it also allowed them a chance to plan.
"During the pause, I would hope that all student loan borrowers took the time to really do a deep dive and reflect on their personal financial situations, on their budgets, and on their personal choices," he said. "So when the pause came to an end on Sept. 1, that they were already in position with the plan to successfully and transparently step back into meeting the repayment obligations."
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