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When Do Student Loan Payments Resume?

When Do Student Loan Payments Resume?

On March 13, 2020, the United States Federal Government announced a brief memorandum on student loan debt in response to the COVID-19 pandemic. The memorandum and its implications certainly had borrowers confused as to what was to come. Labeled the “CARES Act” bill for student loans, was signed into law by President Biden. This student loan payment “pause” was designed to alleviate some of the financial hardships. The situation is more complex now, considering the financial crunch faced by millions of Americans due to job loss (whether permanent or temporary). In light of the brief memorandum on student loan debt – here’s a closer look at what could happen when student loan payments resume.

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A closer look at the current student loan crisis

As the student loan payment suspension comes to an end, the roughly 43 million Americans that currently owe student loans are in the dark regarding the restart of loan repayments. January 31st of 2022 will mark the end of the CARES Act student loans pause. More importantly, the date also marks the end of 0% interest rates on student loans. Despite lobbying and coercion for an extension on the window from borrowers and proponents of student loan forgiveness alike, President Biden has officially stated that there are currently no plans to extend the student loan payment pause.

What’s worse, information on how those 43 million Americans are to go about resuming their payments is scarce. The logistics are, as of now, left up to the student loan debt servicers. Most of these debt servicers claim there are not prepared to continue to collect payments from their debtors. Adam S. Minsky, a student loan attorney, went on the record recently with Fortune. He added that an additional CARES Act student loan pause period is improbable. What’s more, he expects many people with student loans to struggle in the face of the newly reintroduced payments. Minsky points to the fact that the national economy is still “far from recovered” as “millions of Americans continue to struggle with unemployment, face evictions, and foreclosures.”

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Borrowers, lenders, and the student loan pause

The bottom line is that borrowers need smart solutions to tackle their debt in a more focused, efficient manner. That’s where intelligent financial wellness apps embedded with effective debt APIs come into the picture. Whether it’s student loan debt, credit card debt, mortgages, or other debt obligations – they need efficient management. Smart debt APIs help financial wellness and debt management apps achieve this with ease.

That’s where API makers like Spinwheel come in. Spinwheel has developed cutting-edge debt APIs that focus on ease of access. Spinwheel helps make your already familiar financial wellness and debt repayment apps smarter than ever. This could be as simple as letting customers use their financial data to better optimize their loan payments. Other use cases include helping employees manage debt efficiently, or simply offering a debt repayment calculator to help customers gain quick insights. Spinwheel is the leader in unlocking consumer value with debt APIs, and thanks to their easy-to-use drop-in API modules, your developers can customize and implement quickly. Spinwheel has a strong focus on helping tackle student loans while helping students get out of debt sooner. For more information, visit Spinwheel here.