The Blubber

After repeatedly extending the pause on student loan payments for three years, the U.S. Department of Education has confirmed that payments will indeed resume in October, and changing this plan will be challenging due to a recent law passed by Congress.

As the pandemic-era policy comes to an end, it will likely be a significant adjustment for the approximately 40 million Americans who have education-related debt. On average, borrowers face a monthly bill of around $350.

The payment pause has had a profound impact on many borrowers, providing them with financial relief and the opportunity to improve their financial situations. Persis Yu, the deputy executive director at the Student Borrower Protection Center, acknowledged that the pause has been life-changing for numerous individuals, saving them from financial ruin or helping them make progress towards their financial goals.

During the initial announcement of the student loan payment pause in March 2020 by former President Donald Trump, interest accrual was also halted. Since then, the pause has been extended eight times. The overwhelming majority of eligible borrowers have taken advantage of this relief, with less than 1% of qualifying borrowers continuing to make payments on their education debt, according to an analysis conducted by higher education expert Mark Kantrowitz.

As borrowers prepare for the resumption of student loan payments, it is essential for them to understand the upcoming changes and plan accordingly.