AUSTIN, Texas — The Biden Administration's plan for student debt forgiveness is currently being considered by the U.S. Supreme Court, and its decision is likely to come as soon as later this month.
Payments are expected to resume 60 days after June 30. Because of that, experts say borrowers need to gear up for making their payments.
The payments will resume for all borrowers with an outstanding federal student loan balance, regardless of whether or not the Supreme Court allows or strikes down President Joe Biden's plan.
"For students who are going to be making payments, it's really important that they look at all of the payment options available through their federal student loan servicer," said Jennifer Finetti, director of student advocacy at ScholarshipOwl. "So the first thing to do is make sure that your student loan servicer knows who you are and where you are and that you know who they are. Because in the last few years, students have moved."
If the Supreme Court allows the Biden Administration's student debt relief plan to move forward, any Pell Grant recipient with more than $20,000 in federal student loan debt will begin repaying on the amount greater than $20,000. All non-Pell Grant recipients will begin repaying on the amount greater than $10,000.
If the Supreme Court strikes the plan down, then all borrowers with federal student debt will begin repaying their entire balance on Aug. 30.
Anyone with private loans won’t have any of their private student loan debt forgiven, in any case, because private loans were not part of the federal student debt forgiveness plan.
Finetti said all students with federal student loans should look at their repayment plan options.
"A lot of students don't realize that there is a default set payment plan, which is the standard repayment plan that everyone gets dumped into. But that might be not the plan that's best for you," Finetti said. "There are a whole slew of other plan options that you can look at and talk about with your loan servicer to figure out what's going to be best for you."
Experts say be aware that if you consolidate your loans, it's possible that you may not qualify for some of the forgiveness programs that are either pending, currently available or future options.
Rather than taking out loans to pay for college, Finetti said students should focus on earning the funds they need through scholarships as well as income from a job. Many students don’t realize that scholarships are available year-round, and the summer is a great time to prioritize applying for scholarships since they have more free time than they had during the school year.
"If you can earn your income through a job and through scholarships, then you can pay for college as you go and you will not need to have the burden of debt when you graduate," Finetti said.
It's advised that borrowers visit the Federal Student Aid website to update their contact information and learn who their loan servicer is. Many loan servicing companies sold loans to other companies in the past few years, so borrowers need to make sure that they have their loan