Once people start to repay student debt again all those expensive trendy useless mall shops will start shuttering their satanicly advertised windows:
US Economy Braces For Chaos As $1.5 Trillion Student-Loan Pause Ends
After a three-year pause due to the pandemic, some 28 million US borrowers will once again face their student loan obligations – while grappling with scorching inflation.
What’s more, there are fundamental issues with servicing the deluge of borrowers, according to lenders, consumer advocates and lawmakers. As Bloomberg notes, several loan administrators have slashed staff, are operating on antiquated computer systems, and have provided inadequate training.
The logistics are daunting. Many borrowers were assigned new loan servicers after some of the biggest companies, such as Navient Corp., quit the federal program. The Biden administration’s failed attempt to forgive some of the debt has left some folks confused about whether they need to pay at all. Then there’s bewilderment over income-driven repayment plans and the legions of scammers sure to be looking for easy marks amid the upheaval. It could be a mess. -Bloomberg
“This is one of the most confusing things I’ve been through,” said 28-year-old Courtney Young, who will be working with the third federal loan servicer assigned to her in four years on her $54,000 in government loans, which she took out to study at Winston-Salem State University in North Carolina.
“I know I’m probably not the only one who’s logged in and said ‘Hey, what’s going on?’” Young told Bloomberg, after her federal servicer said she isn’t required to pay anything until April.
According to a letter to servicers written by six Democratic senators led by Elizabeth Warren (MA), “The restart of tens of millions of borrowers’ student loan payments marks an unprecedented event with a heightened risk of borrower harm.”
That said, the biggest risk to borrowers — assuming they can avoid outright scams — might be time wasted on the administrative hassle related to setting up their accounts and choosing a repayment plan. While interest will begin accruing Sept. 1, borrowers that don’t make full payments won’t see any demerits on their credit report for the first 12 months.
Loan servicers want to go full-speed ahead, but they’re concerned there isn’t enough time to communicate with borrowers. Servicers process payments and help struggling borrowers figure out repayment plans. -Bloomberg
h/t irthdog7
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