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How will the end of emergency covid measures affect borrowers?

February 23, 2023
2 minute read

At the end of January 2023, President Biden announced to the public that emergency covid measures will come to an end on May 11, 2023. Nearly two and a half years after the covid-19 pandemic seized the world and caused governments to take immediate action, the Whitehouse has formalized an end to policies specifically related to the pandemic. Many emergency of these measures fell under the HEROES Act: a quickly passed bill to provide relief to many Americans directly affected by the pandemic and lockdowns.

Part of this relief package was the pausing in student loan interest payments. Essentially, borrowers who had federally-provided student loans were not obligated to pay down their interest. This freed up capital for borrowers to allocate elsewhere they needed funds most. As the world puts the pandemic in its rearview mirror–much like the 1918 Spanish flu–the Whitehouse, too, looks to retire this policy that provided relief to borrowers.

In January of 2023, the Supreme Court agreed to hear the case that would allow the Whitehouse to provide up to $20,000 of student loan forgiveness. According to TIME Magazine, experts say they are doubtful the resolution will pass the Supreme Court.

So what does this mean for borrowers? Student loan payments are likely to resume in June of 2023 when the current pause ends. An additional pause may be possible, but signs are pointing to resumption of payments. Should payments resume, borrowers are entering a payment period vastly different than 2020. With inflation high, and payments due, borrowers may experience the strain of having less capital to afford basic goods like shelter and food, while needing to afford their payments. We covered the topic of how inflation can strain borrowers here.

Should the Supreme Court deny the one-time forgiveness plan and payments resume in June in a downturned economy, some student loan borrowers may experience tighter financial conditions. Blissfund, upon its launch, will provide tools for borrowers to seek help with their student loans. In the mean time, Blissfund is devoted to providing helpful, informative content to help borrowers navigate their situations.

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