,NEW YORK — After three years, the pandemic-era freeze on federal student loan payments will end this fall.
Experts say that delinquency and bankruptcy should be options of last resort, and that deferment and forbearance — which pause payments, though interest may continue to accrue — are often better in the short term.Once the moratorium ends, borrowers who can’t or don’t pay risk delinquency and eventually default. That can badly hurt your credit rating and make you ineligible for additional aid and government benefits.
Rodriguez says her organization always advises against deferment or forbearance except once a borrower has exhausted all other options. In the long term, those financial choices offer little benefit, as some loans will continue to accrue interest while deferred. “That doesn’t mean people shouldn’t look into it,” Rodriguez said. “But they may not be successful at discharging their loans.”
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Here's how to prepare to start paying back your student loans when the pandemic payment freeze endsRegardless of how the Supreme Court rules this week on a White House plan, a three-year pause on federal student loan payments will soon end.
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