🎓 The Ride Isn't Over: Student Loans Payments Resume 💸

We’re talking about student loans Reader. Yes, again.

Student loans, the definition of a double edge sword. They gave us the chance to learn, grow, build careers, and start drinking away from home. But they also brought on decades of debt. For millions of Americans, that lifetime of debt saw a brief break during the pandemic with the pause of federal loan payments.

But as you know, they won’t let us have anything too good, so it’s coming to an end. At the end of August, federal student loan payments are making a comeback. Even though I just paid mine off (and my private loans gave me no break) … it’s important information and I want to ensure you’re prepared.

THE PANDEMIC, STUDENT LOANS, AND THE GREAT PAUSE

Oddly enough, it was the debt ceiling that brought about the return of student loan payments. If you don’t know, the debt ceiling is like America’s self-imposed credit limit. In order to get it raised, some negotiation happened and some compromises were made. One of them was an end to the three years of pausing federal student loan payments.

Come the end of August 2023, federal student loan payments and accruing interest are back.

WHAT YOU NEED TO KNOW

Five extensions, three years, and two presidencies later, the pause on payments is finally coming to an end. If you've been sipping mimosas in Tulum with the money you've saved, it's time to adjust the budget and brace for the financial impact.

Remember when Biden passed that federal loan forgiveness? Overnight $10K to $20K of student loans were to disappear for millions of Americans, right? Well, some people weren’t happy about it and legal challenges put it all on hold. For now, any forgiveness is on hold and may never see the light of day. If it does happen, you can expect lower payments in addition to a lower balance, as payments will get recalculated luckily.

And several loan servicers, the people collecting your check, got out of the game. There is a chance that the company you know and “loved” is no longer working with you. Make sure you are paying the right person when things start again.

WHAT'S NEXT?

If you've forgotten what a student loan payment looks like (can't blame you), it's time for a refresher. Log into your portal, find out your new payment, and make sure it fits into your budget. If it doesn't, now's the time to adjust—better a self-inflicted pinch now than a punch to the gut later.

Remember, knowledge is power. So, take this heads up and make sure you're ready for the ride ahead. In the end, these loans are just a part of our journey. And hey, I just paid mine off, so I can assure you it can be done. Keep hope alive.

"The Pragmatic Mr. Peters"

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