YORK, Pa. — Tens of millions of Americans will soon be required to resume monthly payments on student loans. This week, the Biden administration announced that interest will resume on September 1, with the first loan payments being due in October.
The federal pause on student loan payments was first introduced during the height of the pandemic and was extended nine times over the past three years.
“I think with it being pushed back so many times, there was a feeling of that it was never actually going to start again," said Hannah Willow.
Willow is a recent York College graduate with around $32,000 in federal student loans. She says the pause allowed her to save enough money to pay some of her private loans and buy a house.
With debt payments restarting and the fate of the President's student loan forgiveness plan up in the air, Willow said it’s a stressful situation.
“It almost feels like the fate of our finances are always in someone else’s hands, not ours," said Willow. "That’s really stressful to think about.”
Tracy Burke with Conrad Siegel says now is the time for borrowers to start preparing to repay their student loans. He adds some people will have no issues restarting payments, while others will have a harder time.
“Some folks haven’t been in that frame of mind to make payments, so this is monumental for a lot of folks," said Burke.
He advises people to look at their budget to see what they can do to fit in student loan payments.
“Essential expenses, you’re probably not going to cut anything out," said Burke. "But your discretionary [expenses,] see what you can pull back so you can make those student loan payments again.”
Willow said she’s preparing for student loan repayments by tightening her household budget and weighing whether to get a second job. She said she remains hopeful to get out of her debt in the future.
“We just got to hold onto that because if you don’t, it kind of weighs on you," said Willow.
The US Supreme Court will rule whether to preserve President Biden's plan to cancel up to $10,000 or $20,000 for millions of qualified borrowers. The ruling is expected to come down in the coming weeks.