The federal moratorium that began with Covid ends on August 31. Borrowers can save money and avoid confusion by taking some key steps right now.
The federal moratorium that began with Covid ends on August 31. Borrowers can save money and avoid confusion by taking some key steps right now.
It’s happening. The moratorium on repayments and interest on $1.6 trillion in federal student debt owed by 44 million Americans really is ending this time—on August 31. The pause began back in March 2020 as an emergency Covid-19 relief measure and was extended again and again, often at the last minute, making it tempting for borrowers to tune out. But a deal between President Joe Biden and congressional Republicans sealed the moratorium’s end and a Supreme Court decision killed Biden’s plan to forgive $10,000 or $20,000 in debt for most borrowers, wiping out future payments for nearly 20 million folks.
Perhaps you’ve heard payments won’t restart until sometime in October. True, but interest is going to start accruing on Sept. 1, and there are things some or most borrowers may need—or want—to do this month.
Here’s the most common reason to act now: Since the start of the moratorium, up to 30 million borrowers have gotten a new loan servicer. That, plus the fact that younger folks tend to move a lot, means it’s entirely possible your servicer doesn’t even have your current address.
Fortunately, the servicer/address snag should in theory be one of the simpler issues to resolve: Go to the Department of Education run site StudentAid.gov to review your contact info, and update as needed. Then check for the servicer you’re assigned to now, go to its web site, create an account and update your address there, too. Belt and suspenders.
Perhaps not surprisingly, borrowers are already encountering significant problems ahead of the restart, but at this point, waiting for an all-clear signal simply isn’t practical.
Anyway, there’s a laundry list of reasons to act. Were your payments being automatically debited from your checking account? You’ll have to reauthorize that.
