WASHINGTON — Student loan payments will officially begin again later this year, ending a three-year pause that began during the COVID-19 pandemic and insulated millions of Americans from paying down education debt.
In a 6-3 decision, the conservative-majority court ruled Friday to block the efforts to erase up to $20,000 in student debt for more than 40 million Americans.
The plan President Joe Biden announced last August would cancel $10,000 in federal student loan debt for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically come from lower-income households, would receive an additional $10,000 in debt forgiveness, for a total of $20,000.
Are student loan payments resuming right away?
Following Friday's Supreme Court decision, borrowers will still have a few months to get their finances in order before payments are due and interest resumes on student loans.
For a time, there was some uncertainty over when student loan payments would resume. All the way back in November, the Biden administration said the payments pause would end 60 days after June 30 (Aug. 29) or 60 days after the Supreme Court ruled on the administration's student loan forgiveness program — whichever came first.
The court's ruling just so happened to come down on June 30.
Will the student loan pause be extended again?
As part of the deal to raise the nation's debt ceiling, Biden and House Speaker Kevin McCarthy further formalized that the student loan payment pause will end 60 days after June 30, 2023. So Biden is not able to extend the pause again.
The U.S. Department of Education has confirmed that student loan payments will be due again in October, restarting loans that have been frozen since March 2020.
A notice at the top of the federal government's student aid website confirmed when student loan payments would resume.
"Congress recently passed a law preventing further extensions of the payment pause," the statement reads. "Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October. We will notify borrowers well before payments restart."
When are student loans due?
The new dates provided by the Department of Education confirm that interest will kick in starting Sept. 1, but borrowers won't need to make payments until October.
The department didn't provide a specific date for payments to begin in October.
In an emailed statement, a spokesperson for the DOE said the Biden administration was still working to ease the transition back to monthly payments for millions of Americans. The statement said the administration would be in touch directly with borrowers and loan providers ahead of October.