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The restart depends on the timing of the Supreme Court decision

When student loan payments resume depends on how long it takes for Supreme Court justices to make a decision on the president’s plan, higher education expert Mark Kantrowitz said.

In November, the US Department of Education announced the latest extension of the federal student loan payment pause, saying bills would resume 60 days after the settlement of the student loan forgiveness plan litigation. If legal issues with the administration’s forgiveness plan remain outstanding by the end of June, or if student debt forgiveness is not allowed to proceed by then, payments will resume in late August.

“If the court makes a ruling a few weeks after the Feb. 28 hearing, repayment could resume in May or June,” Kantrowitz said. “If they wait until the end of the semester in June or July, there’s a restart in August or September.”

In an analysis of the last Supreme Court’s tenure, Kantrowitz found that half of the decisions were made in June.

Service providers determine when your payment is due

Federal student loan payments have been suspended since March 2020, when the coronavirus pandemic first hit the US and crippled the economy. Resuming bills for more than 40 million Americans will be a daunting task.

When a borrower is due to repay depends in part on their timeframe with their servicer, Kantrowitz said.

“You’re not going to resume all student loan payments on the same day, everywhere, all at once,” he said. “Most likely, borrowers will have the same maturity date as before the pandemic.”

And another extension is still possible, added Kantrowitz. He noted that on previous extensions to the payment break, the Department of Education had twice previously said it would be the final extension – only to extend it again.

During the extended payment break, the Ministry of Education will also stop all collection activities, including wage garnishments and tax refunds.

The Supreme Court will decide the fate of the loan forgiveness

Shortly after Biden announced his sweeping plan to forgive up to $20,000 in student debt for millions of Americans, a number of conservative groups and Republican-backed states attacked the policy in court.

Two of those lawsuits — for which the Supreme Court has agreed to hear oral arguments — were successful in halting the appeal, at least temporarily.

Supreme Court justices should put an end to uncertainty about loan forgiveness.

Sixty days will be enough to forgive student loan debt if the president’s plan survives.

Markus Kantrowitz

university expert

“The benefit of the Supreme Court’s ruling is that it will settle all of the litigation related to the loan forgiveness for now,” Dan Urman, a law professor at Northeastern University, said in a previous interview with CNBC.

If the judiciary allows student loan forgiveness, many borrowers will never have to resume payments. The White House estimates that around 20 million people could be completely forgiven of debt under the president’s plan.

“Sixty days will be enough to forgive student loan debt if the president’s plan survives,” Kantrowitz said. “They’ve already approved 16 million borrower forgiveness, so all they have to do is share that information with the loan servicers.

“It should take a week or two for the service providers to complete the implementation.”

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