43 million Americans with federal student loans have not been required to make payments since March 2020, when the Trump administration exercised its authority to offer “national emergency forbearance” during the height of the COVID-19 pandemic. 

That now comes to an end after the passing of the debt ceiling deal, signed into law by President Biden on Saturday, which requires borrowers to begin making payments on outstanding balances no later than 60 days from June 30 (or around August 29).

With borrowers back on the hook to start making payments again this fall, here are three key questions ahead:

  1. Will the Biden loan forgiveness plan weather a Supreme Court challenge? Now that the pause on repayment is over, the big question for an estimated 40 million borrowers is whether the amount that they have to repay will be reduced with the fate of Biden’s $400 loan forgiveness plan which gave eligible borrowers up to $20,000 in debt relief. 
  1. Is the Department of Education ready to service a surge in borrower inquiries? While certainly there’s a question if borrowers themselves are ready to repay their monthly loans, the bigger question is whether or not servicers and the Department of Education can keep pace with a spate of likely issues and questions as payments start again that could lead to default and delinquency.

    The shift to repayment comes after the Federal Student Aid had its budget cut, with worries that re-negotiated contracts with servicers could lead to long wait times and poor customer service.
  1. Interest rates hit a 10 year high. Will that deter future students?  Student loan rates are tied to the 10-year Treasury Note High Yield with a fixed add-on set by Congress. 2023-2024 rates will be the highest since 2010. 

With institutions working to stabilize enrollment after three years of decline, will higher rates impact learners’ willingness to borrow to attend college? For the past three years borrowers did not collect interest on their loans and their rates are mostly fixed; however, new borrowers face increasing rates.