NAPLES, Fla. — After five years of frozen payments, big changes are coming for student loan borrowers. On May 5, federal student loan repayments will resume.
"I think that the impacts are gonna be hard," said Amaria DeCola, an FGCU student said, while taking her graduation photos.
Watch as she explains her concerns:
Borrowers who fail to set up a repayment plan in time could face consequences. The government can garnish up to 15% of wages after taxes, meaning someone earning $2,000 a month could lose about $300. Tax refunds and Social Security benefits could also be withheld, and borrowers may see their credit scores take a hit.
FGCU economics professor Victor Claar says budgeting for loan repayments needs to be a top priority.
"For most Americans, your student loan bill will likely be a pretty significant amount of your monthly budget," Claar said, "You need to treat it like a mortgage or other must-pay bill and organize your life around making that payment."
The exact repayment amount will vary based on a borrower's loan size and the type of repayment plan agreed to. Income-driven repayment plans are available for those who qualify, and more information is available at StudentAid.gov.
The return to repayment comes after President Biden’s proposed loan forgiveness program was struck down by the Supreme Court in 2023.
"Now for this to come up and be kind of like, 'nevermind'... I think that's confusing and unsettling," DeCola said.
