Student loan forgiveness, repayments, and taxes: What you need to know
After several months on hold due to a legal challenge, the U.S. Supreme Court has struck down the Biden-Harris Student Loan Forgiveness Plan. The decision sets off a series of financial considerations for millions of Americans who hold student loan debt.
One big task for many will be to get ready for student loan repayments that must start again in October. Preparing is critical at a time when economic pressures, such as inflation, are still affecting many household budgets.
We understand how important this change is for individuals and families alike. The team at H&R Block is here to help you unpack this topic and understand any to-dos you may have now and in the coming months.
Getting ready for repayments in October
A lot has changed since March 2020 when pandemic relief put student loan payment requirements on hold. Think about what may have changed in your own life: Bank changes, address changes, income changes, and more.
Now that this freeze is lifting, it’s a smart idea to cover your bases to make sure you don’t miss your payments. Interest on loans will restart by Aug. 30, and you should start making loan payments again by Oct. 2023.
Review the list below to get prepared.
- Check with your loan servicer to make sure your address, banking, and direct deposit information is still accurate. You want to make sure your payments will go through to the right place.
- Update and/or recertify your income information if you have a repayment plan.
- Revisit your budget to see where your payments fit it. If you’re like many, you may have taken on other financial obligations over the last three years.
- Set up or update repayment plan through the U.S. Department of Education at https://studentaid.gov/manage-loans/repayment/plans if you know you need to restructure your payments.
- Keep good records for tax time as the interest you pay can be deducted from your taxes when you file next year.
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