Student loan payments are set to resume in September — should you pay now or wait for loan forgiveness?

• Loan servicers have been asked to hold off on sending repayment notices to borrowers, official says.
• Borrowers who can afford to pay say it's a 'big deal' to chip away at their principal loan balance.

Student loan payments are slated to resume Sept. 1, and borrowers and experts are debating what's next as the two-year pause in paying down $1.6 trillion of federal debt comes to an end.

A 2021 report from the US Department of Education found that only 500,000 borrowers out of 43 million opted to continue their payments during the pause, which was prompted by the Covid pandemic.

Currently, potential legislation driven by the Biden administration could cancel between $10,000 and $50,000 of debt, or in some cases, an entire student loan. During President Biden's campaign, he promised to ease student debt, although the original plan of $10,000 of forgiveness was met with criticism as politicians, such as Sen. Elizabeth Warren, pushed for $50,000.

But it's unclear what the government's next steps will be on loan debt and time is running out for students.

A Bloomberg op-ed by Alexis Leondis recently discouraged borrowers from continuing to skip student loan payments once the pause ends, suggesting that doing so could prove "short-sighted."

"One recent study shows that student loan borrowers were more likely to have taken out a first mortgage while payments have been frozen compared with those who have no student loans," Leondis wrote. "That raises the question of how tight their budget will be when they eventually have to resume payments."

With the current interest rate at zero, student loan repayments would go directly toward the borrower's principal balance. This helps loans get paid off quicker than before the pause, but money could end up being wasted if forgiveness is on the horizon.

Executive Director of the Student Loan Servicing Alliance Scott Buchanan told USA Today that the federal government asked servicers to hold off on sending repayment notices to borrowers for now.

Buchanan said the government "didn't want to blanket millions of borrowers with communications about resumption if that is going to change."

Student loan expert Mark Kantrowitz argues that borrowers should set aside payments that would have been put toward loans in a savings account to "build a financial cushion" instead of completely skipping out on payments, according to the same USA Today report.

That money could be used to pay off debts with higher interest rates, like credit cards, Kantrowitz said.

Social media users are speaking out about whether they can handle continuing loan repayment once the pause is lifted in September.

One Tiktoker who typically posts about student loan forgiveness has advised viewers to "pay attention to communication from (their) loan servicer" in the coming weeks.

@mosdotcom soooo…do loan payments restart next month or what? #studentloans #studentdebt #studentloanforgiveness #collegetok #financialaid #fintok #moneytok ♬ original sound - Mos.com

She suggested that a lack of communication from servicers is an indication of an extension on the pause.

But some commenters just responded with weariness over the approaching deadline.

"It'd be evil of them to start them back up in this economy. As if this generation isn't struggling enough to put gas in their car and find housing," one comment read.

Another described a different plan of attack. "I took advantage of the whole 'no interest during the pause' thing and paid mine off during the pause," they wrote.

In 2021, doctoral student Travis Smith told USA Today that he used the pause to aggressively pay off his $30,000 of student loan debt while his wife supported them on her salary.

"I just got basically sick of the principal never changing on loans," he said. "We knew how big of a deal that was to be able to knock the principal down, so I hope others recognize that too."