[Editor's Note: With the historic breaking news this week that the federal student loan pause would end, the White Coat Investor's student loan expert has filed a Friday night special report.]


By Andrew Paulson, CSLP, Lead Student Loan Consultant and Co-Founder of our partner site StudentLoanAdvice.com

President Joe Biden said he would sign the debt ceiling bill on Saturday, effectively ending the chances of a nationwide default and ensuring the US will continue to pay off its debts. It also means those who have student loans will have to restart the cycle of paying off their own debts. The Fiscal Responsibility Act, cobbled together in negotiations between Biden and House Speaker Kevin McCarthy and then passed on a bi-partisan basis this week in the House of Representatives and then in the US Senate, puts an end to the three-year student loan moratorium that was started during the COVID pandemic.

If you have student loans that you haven't paid on in the last three years, what comes next?

Payments and interest on federal student loans are set to resume 60 days after June 30. Payments and interest on loans have been paused since March 2020 when President Donald Trump announced a national emergency because of COVID. Prior to this debt ceiling bill, the resumption of payments and interest was tied to student loan forgiveness.

Student loan forgiveness was raised in an executive action by Biden in 2022 to forgive $10,000-$20,000 for borrowers making under $125,000 if single or $250,000 if married. The executive order has come under scrutiny and is currently awaiting what could be a landmark decision from the Supreme Court. The Supreme Court is expected to rule on student loan forgiveness in late June or early July. If the Supreme Court rules in favor of student loan forgiveness, payments will resume 60 days after that date (which could expedite payments a little if they rule before June 30).


Who Needs to Take Action After Student Loan Payments Begin Again?

If you have federal student loans and have yet to enroll in a repayment program, make sure you’re enrolled prior to payments resuming. If you’re interested in loan forgiveness such as Public Service Loan Forgiveness (PSLF), you should enroll in an income-driven repayment (IDR) plan.

If you are already enrolled in a repayment program, no action will be required initially. If you are in an IDR plan, the next time you will be required to recertify income is at least six months from the date that payments begin. Your payments in IDR will be based on your most recent income certification. And for many, it’ll go all the way back to your 2018 tax return.

More information here:

Should I Pay Off My Student Loans?

How to Ensure Student Loan Forgiveness Through the PSLF Program


What About Student Loan Initiatives, Like New REPAYE and the IDR Waiver?

student loan holiday over

The debt ceiling bill does not inhibit student loan initiatives such as new REPAYE or the IDR waiver, and it does not claw back any benefits from the student loan pause. Initially, McCarthy and Republicans wanted to block the $10,000-$20,000 of student loan forgiveness, but it didn’t make the final bill.

During an Oval Office address on June 2, Biden said, “Passing this budget agreement was critical. The stakes could not have been higher . . . No one got everything they wanted. But the American people got what they needed.” Biden didn't mention anything specific about student loans during his 15-minute address to the country.

There is another bill regarding student loan forgiveness that has passed the House and Senate, with some Democrats voting for it, that would overturn Biden's executive order. However, Biden has stated he will veto the bill. It’s unlikely to have enough support in Congress to override Biden's veto. If Biden's veto stands, all eyes will turn to the Supreme Court and its eventual ruling later this summer.

More information here:

How Much Are Federal Student Loans Worth?


With the loan moratorium expiring, now is the perfect time to make a plan on how to tackle your student loans. If you don’t have a plan or you are confused about the best steps moving forward to get the best deal on your student loans, schedule a consult with StudentLoanAdvice.com. Over the years, SLA has advised on nearly $300 million in student debt helping white coat investors across the country win on their student loans.

What do you think? What are your plans now that you have to start paying on student loans again? Have you invested the money that you would have had to pay in the past three years? Comment below!