Following a summer of congressional negotiation and legal defeat for the White House, interest on student loans is set to begin accruing again on Sept. 1 after a 3.5-year pause. Repayments on loans are also set to restart in October.
Financial experts have been urging those with loans to prepare.
"We've had inflation, that has really eroded a lot of our buying power, people have gotten used to the last three years of not having that bill," EFG Financial Owner and Fiduciary Advisor Kelly Gilbert said
Gilbert said borrowers should make budget plans ahead of their payments.
"Make sure that it's in your budget, you don't want to let that go by, you still want to cover your savings, emergency savings, make sure you have that, you still want to make sure you have retirement savings."
The U.S. Department of Education also established its own site to inform both experienced and first-time borrowers as to what steps they can take to make sure they are prepared to restart their payments. The steps include updating your contact information, exploring affordable repayment plans, identifying which servicer currently hold your loan and finding out what your monthly payment will be.
"Planning and preparing that it's going to come back into your budget is probably the number one thing that most borrowers need to take care of right now," Gilbert said.
The Biden Administration has begun exploring new options to loan forgiveness in recent weeks since its original plan to forgive up to $20,000 for tens of millions of borrowers was struck down by the Supreme Court in June.
On August 22, the White House announced its newest attempt at debt relief what it calls the Saving on a Valuable Education (SAVE) plan.
The White House says is an income-driven plan that would feature low monthly payments for low-income borrowers and forgive debt after 10 years for those with less than $12,000 in their original loan.
Borrowers do need to sign up for the new plan to qualify.
