How the Debt Ceiling Deal Affects Student Loan Moratorium
By Mitchell J. Smilowitz, CPA
The debt ceiling deal recently passed by Congress and signed into law by President Biden ends the student loan payment moratorium. The agreement requires borrowers to begin repaying their loans within 60 days of passage of the legislation, around August 30.
President Biden had already stated that the moratorium would end soon. Implemented to reduce the financial impact on Americans during the pandemic, the rationale for the moratorium has receded along with the public health crisis.
What Should You Do?
- Make sure your student loan servicer has your current contact information.
- If you don’t remember who your student loan servicer is, log into studentaid.gov then look for your loan servicer. Or, call the Federal Student Aid Information Center at 800-433-3243.
- About three weeks before your payment is due, expect to receive a billing statement from your loan servicer. The statement should include the payment amount and due date.
- Those who were on an automatic payment plan prior to the student loan payment moratorium (March 13, 2020) must opt back in. Your loan servicer should contact you about the automatic payment plan. If you do not respond, your payments will not automatically restart.
Student Loan Forgiveness Remains On-Hold
As of this writing, the future of the President’s student debt forgiveness plan remains uncertain pending a decision by the Supreme Court. The proposed plan would cancel $10,000 in student loan debt for those with incomes below $125,000 per year, $20,000 for those who received Pell grants for low-income families.
June 2023