Student debt repayments will resume on January 1 for millions of Americans.
Now is the time to prepare to start paying again.
Making payments before the break ends and refinancing are among the options to consider.
Tens of millions of Americans will have to start resuming federal student debt in January, but are they ready?
President Joe Biden said last week that those who earn less than $125,000 (or $250,000 for families) annually are eligible for $10,000 in federal student loan waivers. Pell Grant recipients are eligible for a $20,000 cancellation.
Anyone else or those who still have student loans after cancellation have paused repayments until December 31 (including this pause until the end of the year, repayments have been suspended seven times since March 2020).
By the time payments resume on January 1, it will be nearly three years since borrowers last had to pay.
Those consumers are already confronted with rising interest rates and nearly 40 years of high inflation that are blowing their wallets.
“We can’t lose sight of the fact that there will still be significant amounts of student loan debt outstanding across the country,” said Kristen Carlisle, general manager of Betterment at Work, a money manager and online financial consulting firm.