May 11, 2022
Story at a glance
Experts say there are steps student borrowers should take to prepare for the start of the repayment period even if there’s another extension or some form of loan forgiveness.
“Budget for the restart of repayment by reviewing your budget to find where you can cut, and maybe start saving that amount to ease into the restart of repayment,” one expert said. “If you don’t have expenses you can cut, look into increasing income.”
“Assume that you’re going to have to start making payments again, and plan for that,” another expert added.
President Biden’s latest extension of the student loan payment freeze gave millions of borrowers a little more time to ready themselves for eventual repayments, but experts say there are steps borrowers should take to prepare even if there’s another extension or loan forgiveness.
The student debt crisis has left roughly 43 million borrowers with $1.7 trillion in collective debt. This has led to growing calls from progressive Democratic lawmakers and advocates for the president to consider widespread loan forgiveness – a decision Biden recently discussed publicly.
“I am considering dealing with some debt reduction,” Biden said in late April. “I am not considering $50,000 debt reduction, but I’m in the process of taking a hard look at whether or not there will be additional debt forgiveness and I’ll have an answer on that in the next couple of weeks.”
A recent analysis from the California Policy Lab showed that the average loan debt of borrowers included in the pause is around $36,800. About 31 percent of borrowers owe $10,000 or less.
Yet experts suggest Americans holding student debt prepare for repayments now, even if they expect another extension of the pause or some form of loan forgiveness.
Student loan expert Mark Kantrowitz recommends borrowers update their contact information, so they can receive important updates on their payment amounts, due dates and the eventual end of the moratorium. A borrower might consider setting up autopay by supplying critical banking information, he added.