Federal student loan repayments restart beginning in October for the first time since they were paused in March 2020.
Student loan payments were paused at the start of the COVID pandemic under the CARES Act.
Borrowers will be required to make a payment sometime next month, and interest will start accruing on them again starting on October 1.
Stetson School of Business Administration's Randall Croom said that means families could have on average $300 fewer dollars to spend on discretionary items each month.
“So for our local economy, there are some businesses certainly, that have benefited from people having more income, that they could control due to the pause or the break in student loan payments. And that might go away," said Croom.
Rollins College Professor of Finance Richard Lewin said that could hit local families hard, especially the ones who are already struggling to pay for groceries, rent and other expenses.
“In the case of Florida, you know, the average person is probably going to be paying $200 or $300 dollars more a month," said Lewin. "And really it's a question of where they can find to squeeze that money out.”
The U.S. Department of Education says borrowers will receive a notice sometime next month at least 21 days before payment is due.
Loans won’t fall into default or delinquency and missed payments won’t be reported to credit bureaus until October 1, 2024.
Student loan repayments are starting around the same time of a possible government shutdown. If there is a shutdown, loan payments will still be due, but there could be delays for borrowers who need to speak with someone at the Department of Education due to the potential of furloughs.
For more information on student loan payments, click here.
The Associated Press contributed to this report.
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