How to Prepare for the Resumption of Student Loan Payments
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What is the main topic discussed in this episode?
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Here's your money briefing for Monday, July 3rd.
What immediate timeline did the Supreme Court decision set for resuming federal student-loan payments?
I'm J.R. Whelan for The Wall Street Journal. Last week's Supreme Court decision about President Biden's student loan forgiveness plan means repayments are set to return in October. And for a lot of Americans, their personal finances look a lot different than when payments were suspended three years ago.
I spoke with so many different borrowers who said that their original plan was, OK, I'll earmark this money, I'll put it in savings, I'll set it aside. And with inflation, with rising interest rates, all of these different things that were happening, they just saw it sort of disappear into their budgets.
WSJ personal finance reporter Julia Carpenter joins us after the break.
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What is the first step borrowers should take today to prepare their student-loan accounts?
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Millions of Americans holding federal student loans are back on the hook for monthly payments after President Biden's forgiveness plan was voted down by the Supreme Court. WSJ personal finance reporter Julia Carpenter joins us. So, Julia, just to be clear, forgiveness is off the table?
We've heard chatter from the administration saying they will do whatever it takes to enact forgiveness. But for now, this plan, the proposed plan that people had read about, is off the table completely.
All right. So what kind of timeline does the court's decision put in place for borrowers in terms of resuming payments?
So for those with outstanding federal student loans, they have until September for this pause to relieve them of payments, relieve them of interest. Interest starts accruing again in September, and then payments will be due starting in October.
Now, I want to ask you about how people should prepare their finances in a moment. But what's the first thing they should do today?
I spoke with Scott Buchanan. He's the executive director of the Student Loan Servicers Alliance, and he said people should review their accounts and look at their payment history. See what you were paying in 2019 and assume for the time being that you will be making that same payment. You know, he also recommended logging into your account, making sure you have your password, making sure you remember how to navigate the interface, all these little things that this three-year pause has sort of given people a reprieve from.
How should borrowers rework their monthly budgets to absorb returning loan payments?
Now is the time to get familiar again.
The suspension of student loan payments at the start of the pandemic in 2020, it really came as a relief for a lot of Americans. But we're in a very different economy now. How should people map out adding these payments back into their budgets?
I spoke with so many different borrowers who said that their original plan was, okay, I'll earmark this money. I'll put it in savings. I'll set it aside. And with inflation, with rising interest rates, all of these different things that were happening, they just saw it sort of disappear into their budgets. So when I've spoken with financial advisors about this, they recommend you take a fine-tooth comb to your budget.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:36
2
What immediate timeline did the Supreme Court decision set for resuming federal student-loan payments?
0:36–1:24
3
What is the first step borrowers should take today to prepare their student-loan accounts?
1:24–3:12
4
How should borrowers rework their monthly budgets to absorb returning loan payments?
3:12–4:09
5
How can borrowers estimate what their monthly payment will be when repayments resume?
4:09–4:32
6
What options exist if borrowers cannot afford to make resumed loan payments?
4:32–6:01
7
How might contact and technical issues with servicers affect borrowers trying to get help?
6:01–7:30
8
What payment-plan changes and forgiveness pathways should borrowers ask their servicer about?
7:30–9:37
Speakers
2 identifiedMore from WSJ Your Money Briefing
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