What to know with COVID student loan repayment pause set to end
PITTSBURGH (KDKA) -- For three years during the pandemic, students, former students and their families had their federal student loan payments suspended, but that ends Sept. 1 and many borrowers are confused about what happens next.
About 1.8 million Pennsylvanians have student loans totaling more than $64 billion, and after three years on hold, that debt must start to get repaid this September but lots of things are making repayment complicated.
"It's extremely confusing and extremely unfortunate," said Alyssa Dobson, the financial aid director for Slippery Rock University.
Dobson says some loan servicers have changed -- Navient and PHEAA, the Pennsylvania Higher Education Assistance Agency, have withdrawn and will no longer service your loan.
"What we like to advise families to do is – all families, regardless of whether your servicer has changed – is to log into studentaid.gov. This is the best place to go for the most current information, and they will be able to show you who your service is and how to get in touch with them," Dobson said.
How much you owe and when exactly in September you must make a payment should be clarified by your servicer, but here's another wrinkle: "There's still this hanging question of whether or not we will be seeing any portion of loan forgiveness," Dobson said.
President Biden's plan to forgive $10,000 in federal student loans and $20,000 for those with Pell Grants has been tied up in the courts by a Republican lawsuit blocking the move. The Supreme Court is expected to rule this month. If the court kills loan forgiveness, sources say the president may try another approach.
"That's going to impact many, many borrowers and the amounts they have to repay," Dobson said.
Most borrowers should receive a billing statement in the mail at least 21 days before their first payment due date in September. While payments were suspended during COVID and no additional interest was charged, whatever you owed right before COVID, you owe now.
"If you're struggling to do this or just don't know how to do this, then call your school. Call the school you went to. If your record is very very old, they may not have the best information for you, but they can certainly get you to studentaid.gov."
Don't wait until late August to call your loan servicer to know in advance your payment due date in September and how much your monthly payment will be.