Payments are due again; How to know if you must restart payment?

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The Biden administration is set to resume the collection of student loan payments in the coming days, despite calls from some progressives to delay the effort. An Education Department spokesperson stated that “even if Republicans needlessly shut down the government, loan payments will continue to be due” starting in October. Interest on most federal loans began accruing again on September 1, and about 28 million borrowers are expected to make a payment next month.

While past government shutdowns have not affected federal student loan borrowers’ obligation to make monthly payments, the current situation presents new challenges for the Education Department. The department has not yet released an updated contingency plan detailing how it would curtail its operations in the event of a government shutdown.

However, officials have confirmed that the agency has enough funding to continue “key” student aid activities, including collecting and managing student loans, for “a couple of weeks.”

“A prolonged shutdown lasting more than a few weeks could substantially disrupt the return to repayment effort,” warned White House press secretary Karine Jean-Pierre on Monday. Rep. Ayanna Pressley (D-Mass.) and Mike Pierce, executive director of Student Borrower Protection Center, a student debt advocacy group, have both called for a freeze on student loan payments if the government shuts down.

SAVE program has been scrutinized

Meanwhile, the Biden administration’s “SAVE” student loan repayment program is under scrutiny. The program aims to lower federal loan payments for borrowers, but its impact is still being evaluated.

The resumption of student loan payments comes after a 3-year pandemic pause. While some borrowers have already received bills in advance of their individual payment due date, which vary across the month, others are concerned about their ability to make payments during uncertain economic times. The Education Department should consider the financial burden that many borrowers are facing and offer support and flexibility where possible.

resumption of student loan payments may be necessary for the government’s financial stability, it is important that the Education Department takes into account the challenges faced by borrowers during these uncertain times.

As Rep. Pressley and Mike Pierce have suggested, freezing student loan payments during a government shutdown may be a necessary step to alleviate some of the financial burden on borrowers. The Biden administration should also continue to evaluate and improve its “SAVE” repayment program to ensure that it is truly helping those who need it most.

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