Jordan Braithwaite, 21, center, an undergrad at Grambling State University facing over $10,000 in student loans, demonstrates outside the Supreme Court, Friday, June 30, 2023, in Washington. A sharply divided Supreme Court has ruled that the Biden administration overstepped its authority in trying to cancel or reduce student loan debts for millions of Americans.
Biden said the authority of the act will provide “the best path that remains to provide as many borrowers as possible with debt relief.” announced a 12-month grace period to help borrowers who struggle after payments restart. Biden said borrowers can and should make payments during the first 12 months after payments resume, but, if they don’t, they won’t be at risk of default and it won’t hurt their credit scores. Interest will resume in September, however, and it will accrue whether borrowers make payments or not.
To determine whether deferment or forbearance are good options for you, contact your loan servicer. One thing to note: Interest still accrues during deferment or forbearance. Both can also affect future loan forgiveness options. Depending on the conditions of your deferment or forbearance, it may make sense to continue paying the interest during the payment suspension.
It’s possible the Biden administration will go through the process, fail to reach a consensus but still proceed with whatever it decides is the best cancellation plan. Given that the administration is just starting the process, Brickman said it’s possible it could take up to two years.
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