'A train wreck coming': Americans brace for the return of student loan payments
The resumption comes as the Supreme Court deliberates student debt forgiveness.
ByPeter Charalambous
June 8, 2023, 4:14 AM
Jamilla Vanbuckley would like to buy a home one day.
A correctional counselor in New York City, Vanbuckley has been living with her parents and tucking as much money as possible into her savings account. But by late summer, she expects a new expense to enter her monthly budget – gradually paying off the $68,000 she owes in student debt.
"I'm gonna have to dip into my savings to start paying back on August 29," she said, mentioning the day that payments for direct federal student loans are set to resume. "And now that kind of hinders the goals I had set for myself for the next couple of years."
Vanbuckley is among the 37 million borrowers who have not been required to pay their student loans since March 2020 due to legislative and executive action during the pandemic.
Education Secretary Miguel Cardona confirmed in May that the Biden administration intends to restart student loan payments by 60 days after June 30, a plan later cemented in the government's deal to suspend the debt ceiling.
However, advocates worry that the resumption of payments and the legal challenges to President Joe Biden's plan to cancel up to $20,000 in student debt can result in catastrophic consequences for vulnerable borrowers.
The uncertainty comes amid a change in debt servicing companies for millions of borrowers and staffing shortages that experts see as unprecedented in consumer finance, resulting in logistical headaches, hourslong wait times, and potential communication errors in billing.
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https://abcnews.go.com/US/train-wreck-coming-americans-brace-return-student-loan/story?id=99881469
