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In late June we got word that the Supreme Court struck down the Biden Administration’s proposal to forgive $10,000 in federal student loans for qualified borrowers (and up to $20,000 for Pell Grant recipients).

And that comes on the heels of another move in Washington that is putting an end to the loan repayment hiatus that has been in place for more than three years.

Ever since March 2020, in response to the financial shock of the Covid pandemic shutdown, the federal government has allowed federal student loan borrowers to forego making monthly payments and froze their interest rate at 0%.

As part of the recent Congressional agreement to raise the federal debt ceiling, this break on student loan repayment will permanently end. Beginning Sept. 1, interest will start accruing again on all federal loans, with repayments beginning October 1. If you had stopped making payments, you need to get ready to start back with repayments come October.

Stand in Your College Debt Truth

Please don’t ignore this looming big change to your cash flow.

Now is the time to look at your finances and make sure you can afford to cover your loan payment. You have a few months to readjust your spending so you won’t fall behind on your student loans. Don’t squander this time. If you are worried about covering your payments, focus on wants vs. needs.

I so want you to be able to take the more expensive vacation or shell out money for concerts. Or get your own place. But those are wants, not needs. Sharing a place with friends, or living back at home are options to consider.

I understand how frustrating the Supreme Court’s decision is. But that’s the law, for now. So right now it’s all about standing in your financial truth and getting ready to restart your student loan repayments this fall.

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    Categories: debt, loans, student loans, students