The Biden administration is attempting to use a proposed aid program to help millions of student debt holders handle the dual blow of payments resuming in October and the Supreme Court striking down a sweeping debt forgiveness plan.
But unlike the current pause on student loans, interest will still accrue on those loans and give borrowers a steeper hill to climb when they begin payments again.
Experts are concerned that millions of Americans who leaned on loan relief throughout the pandemic may be caught off guard under the new system.
“I can envision millions of borrowers who are going to be deluded into thinking they don’t have to think about their student loans for another year,” said Jonathan Petts, cofounder of Upsolve, a nonprofit that seeks to helps people with difficult financial situations.
Interest on student loans accrues daily, posing a serious challenge for borrowers.
Although the Biden administration has worked to change the way student loan interest capitalizes, a balance could grow substantially in a year’s time.
“If you’re capable of making payments on your loans, you should do so,” student loan expert Mark Kantrowitz told The Hill.
“You’re not going to get penalized in terms of ruining your credit,” he continued. “But if you are able to make the payments on your loans, you should do so just try to get rid of the debt as quickly as you can.”
We’ve got more here from The Hill’s Adam Barnes and Lexi Lonas.
