Americans with student loans could see thousands of dollars in interest added to their tabs as part of President Biden’s backup relief proposal, The Hill reported. The Biden administration is attempting to use a proposed aid program to help millions of student debt holders handle the dual blow of payments resuming in October and the Supreme Court striking down a sweeping debt forgiveness plan. Biden’s “on-ramp” repayment plan allows borrowers in financial distress to delay payments from Oct. 2023 to Sept. 2024 without the threat of default or credit score decline. But unlike the current pause on student loans, interest will still accrue on those loans and give borrowers a steeper hill to climb when they begin payments again. Experts are concerned that millions of Americans who leaned on loan relief throughout the pandemic may be caught off guard under the new system. “I can envision millions of borrowers who are going to be deluded into thinking they don’t have to think about their student loans for another year, the same way they didn’t have to think about that for the last three years,” said Jonathan Petts, cofounder of Upsolve, a nonprofit that seeks to helps people with difficult financial situations. “I think there’s a real danger for borrowers right now,” Petts said.
