After three years, the federal student loan pause is coming to an end. Borrowers who’ve had a necessary reprieve from paying back their student debt will now have to restart payments come next week. But for over 800,000 borrowers, there’s actually been some good news.
In July, the Biden-Harris administration announced that 804,000 student borrowers would have their student loans forgiven, totaling roughly $39 billion in debt forgiveness. The move was intended to fix previous errors for borrowers under the income-driven repayment plan, who should have already had the remainder of their debt forgiven after paying for years.
According to the Associated Press, as of this week, roughly 95 percent of those 800,000 plus borrowers have now been notified.
However, that still leaves millions of borrowers left who will have to add yet another massive bill onto their plates come October. As we’ve written about repeatedly at The Root, Black borrowers will be among the most highly impacted group:
According to the Student Borrower Protection Center, roughly 90 percent of Black students take on student loan debt, compared to 66 percent of white students. On average, Black graduates actually owe six percent more on their student loans than when they borrowed the money due to interest, according to the Department of Education. And, white borrowers owe, on average, 10 percent less than what they borrowed. Thanks to a consistent gender wage gap, things are even worse for Black women. On average Black women hold $38,000 in federal student loan debt, according to Education Trust.
There are options for borrowers who are dreading the return of their student loan payments. Borrowers can go on the Federal Student Aid website, to inquire about new income-driven repayment programs like SAVE, or see whether they qualify for different programs since the pandemic. Either way next week, is likely to be a source of anxiety for millions Americans with the weight of the nations nearly 2 trillion student debt crisis on their backs.