After two weeks of resumed federal student loan payments, reports and studies are showing that many borrowers still do not have accurate information about how much they owe or what their monthly payments are.
Student debt relief advocates gather outside the Supreme Court on Capitol Hill in Washington, Tuesday, Feb. 28, 2023, as the court hears arguments over President Joe Biden’s student debt relief plan. [AP Photo/Patrick Semansky]
On October 1, the three-and-a-half-year pandemic pause in repayment and interest accrual for more than 43 million student loan borrowers was ended by the Biden administration. The total amount of federal student loan debt in the US is $1.7 trillion. Since 2003, student debt has been the fastest growing type of household debt, increasing by more than 500 percent over the last two decades.
Of the 43 million borrowers, 28 million people with student loans must now make monthly payments. The other 15 million borrowers are not required to make payments because they are either still in school or are enrolled in some type of repayment deferment, forbearance or grace period.
Some of those in repayment are reporting their government-contracted loan servicers have sent them incorrect bills, they are not able to reach anyone on the phone and, when they are able to talk to someone, the information provided is either confusing, unclear or incorrect.
Among the biggest problems are for borrowers who enrolled in the Biden administration’s SAVE (Save on Valuable Education) plan, which the White House touted as the “most affordable repayment plan ever.” It is one of several income-driven repayment (IDR) plans that supposedly make monthly payments affordable based on a borrower’s current income.
