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From repayment policy changes to a sweeping one-time debt forgiveness plan, 2022 proved to be a high-profile year for student loans.<\/p>\n
But questions have clouded the student loan announcements, and answers are few and far between. We don\u2019t yet know how, when or if some of these changes will take form.<\/p>\n
As 2023 dawns, here are the biggest questions surrounding student loans \u2014 and what borrowers can do to prepare amid the uncertainty.<\/p>\n
Lawsuits have paused the rollout of President Biden\u2019s plan to cancel $10,000 in student loan debt for qualifying borrowers and $20,000 for qualifying Pell Grant recipients. Though 16 million borrowers have already been approved for the plan, they won\u2019t see any debt forgiven unless the White House succeeds in court.<\/p>\n
For now, borrowers should set aside money as if they\u2019re repaying their full student loan and avoid taking on unnecessary expenses, says Scott Buchanan, executive director of the Student Loan Servicing Alliance.<\/p>\n
\u201cIf the loan forgiveness comes, then great, you have a windfall in some respects and extra money that now you can put towards other expenses,\u201d he says.<\/p>\n
The expiration date of forbearance \u2014 the interest-free pause on student loan payments that began in March 2020 \u2014 hinges on the legal outcomes of Biden\u2019s debt cancellation plan.<\/p>\n
We don\u2019t know exactly when it will end under the latest guidance. In November, the White House extended forbearance for the eighth time<\/a>. Repayment is now scheduled to resume 60 days after the lawsuits challenging the broad debt forgiveness plan are resolved, or 60 days after June 30, 2023 \u2014 whichever comes first.<\/p>\n That means the interest-free pause could stretch into August at the latest, but borrowers should prepare to start paying back loans sooner. The Supreme Court will hear oral arguments in February, with an expedited decision expected to follow, in the cases blocking implementation of Biden’s debt cancellation plan.<\/p>\n