Forgiveness, Forbearance and Other Student Loan Changes to Know
BY ELIZA HAVERSTOCK
Politics and a pandemic have shoved stodgy student loans into the spotlight. Since 2020, borrowers have encountered an onslaught of changes to the federal student loan landscape, including more than three years of paused payments, an upcoming repayment plan overhaul and potential debt cancellation. Backtracked announcements and timeline changes have made it difficult for borrowers to keep up with where things stand. Here’s what you need to know and how to prepare for what comes next. PAYMENTS RESUME OCTOBER 2023 Congress has now required that interest will start accruing again on federal student loans on September 1, and student loan payments will resume in October after more than three years of an interest-free federal payment pause, known as forbearance. There’s no chance of further payment pause extensions, due to a provision in the debt ceiling deal passed by Congress on June 2. Forbearance started in March 2020, as the pandemic began sweeping the U.S. What you can do about it: Borrowers should still prepare for repayment to resume in October. Reach out to your student loan servicer if you’re not sure what to expect. OTHER LOAN FORGIVENESS PATHWAYS EXPANDED The U.S. Department of Education has proposed a few recent changes to income-driven repayment, or IDR, plans, which cap monthly federal student loan bills at a set percentage of your income and erase remaining student debt after borrowers make payments for a set number of years.
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