--- title: Student Loan Payments Are Resuming Soon — Here’s How Much Borrowers Can Expect to Pay description: Half of borrowers will owe more than $200 a month. Some will struggle, but it may be more manageable than many expect, a new analysis says. authors: - name: Mary Ellen Cagnassola role: Reporter url: https://money.com/author/mary-ellen-cagnassola/ bio: Mary Ellen (M.E.) Cagnassola is a former reporter at Money, where she covered Social Security, retirement, housing, and employment. Her work reflects her commitment to service and equity in consumer finance. education: Rutgers University, BA Journalism at_money_since: 2021 articles: 205 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes former_staff: true editors: - name: Kaitlin Mulhere role: Editor url: https://money.com/author/kaitlin-mulhere/ bio: Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more. education: University of Florida at_money_since: 2015 articles: 217 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Retirement - Shopping - Taxes social: - https://twitter.com/KMulhere - https://www.linkedin.com/in/kaitlin-mulhere-64503048/ published: '2023-07-19T20:34:25.000Z' modified: '2024-04-17T13:14:22.000Z' section: Everyday Money tags: - News - Student Loans word_count: 896 canonical: https://money.com/student-loan-payments-restarting-monthly-bill-amount/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo collage illustration of a stack of money crushing](https://img.money.com/2023/07/News-How-Much-Student-Loan-Borrowers-Payments-Resume.jpg?crop=0px%2C183px%2C2880px%2C1620px&quality=85) The [end of the student loan payment pause](https://money.com/cardona-confirms-student-loan-payment-pause-ending/) is near — and while new analysis finds that borrowers will undoubtedly struggle to readjust to monthly payments, the transition could be more manageable than many of them expect. New studies from credit reporting agency TransUnion and financial services company Wells Fargo show that the majority of federal student loan borrowers will owe less than $400 a month when payments resume in the fall. Despite the initial challenge that the [reincorporation of monthly payments](https://money.com/prepare-student-loan-payments-resume/) will pose — particularly in combination with new debts and [inflation](https://money.com/inflation-june-2023-rent-insurance/) — researchers say it's unlikely to have an outsize financial impact on most U.S. households with student debt. Starting Sept. 1, interest on federal [student loans](https://money.com/student-loans/) will begin accruing again for the first time since the onset of forbearance in March 2020. The first payments will be due in October, with the Department of Education instituting a [12-month grace period](https://www.ed.gov/news/press-releases/fact-sheet-president-biden-announces-new-actions-provide-debt-relief-and-support-student-loan-borrowers) for the reporting of missed payments. There’s no doubt that student debt is a massive burden — it's the second largest consumer debt after mortgages, and the average borrower spends 16 to 19 years [paying off](https://money.com/gen-z-student-loans-expectations/) their loans. In the time since the COVID-19 forbearance started, [inflation](https://money.com/inflation-financial-hardship-gallup-poll/) and the Federal Reserve's subsequent [interest rate](https://money.com/parent-plus-loans-guide/) hikes have slammed Americans across income tiers. According to the TransUnion study, 53% borrowers facing repayment have also accumulated new credit card debt. Roughly a third (36%) have taken out new [auto loans](https://money.com/best-auto-loan-rates/), which have reached record-breaking highs over the past few years. As a result, TransUnion says that even with ongoing efforts to forgive or alleviate student debt, most borrowers will experience a “payment shock” as they transition to repayment. Wells Fargo also predicts that “the struggle will be real and unfamiliar” for these borrowers, and it will likely slow U.S. spending growth just as inflation is getting closer to the Fed’s 2% goal. But the numbers simply don’t align with the catastrophic borrower expectations recorded by Morning Consult in June. In fact, economists at Wells Fargo say that only about 7% of borrowers (about 3 million people) owe $100,000 or more in federal student loans. More than half of all borrowers have comparatively manageable balances of $20,000 or less, and the annual sum of the average monthly payment will total about 4% to 5% of the annual median U.S. salary of roughly $70,000. “Despite student loan debt having grown disproportionately compared to other categories of household debt in recent years, the majority of households with outstanding student loans do not owe enormous amounts on them,” the Wells Fargo economists write in the study. The Wells Fargo study predicts a small pullback in spending among some households, but overall, returning to student loan repayment probably won’t break the bank for the average borrower. ## Policies to help student loan borrowers Alongside the government's 12-month grace period for missed payments, Department of Education officials have also said borrowers will be able to sign up for a new, more generous repayment plan in the coming weeks. The plan ties payments to borrowers incomes and is expected to save the average borrower $1,000 a year. Following the defeat of President Joe Biden’s student debt relief package in the U.S. [Supreme Court](https://money.com/supreme-court-blocks-student-loan-forgiveness/), the administration said it would pursue a new path toward offering borrowers debt relief. The particulars of the [new forgiveness program](https://money.com/student-loan-forgiveness-whats-next/?ref=/student-loan-forgivness-idr-payment-adjustment/) are still in development, but other pathways to debt relief — like more the more affordable [income-driven repayment](https://money.com/student-loan-debt-forgiven-pslf/?ref=/student-loan-forgivness-idr-payment-adjustment/) plan and revisions to the [Public Service Loan Forgiveness program](https://money.com/student-loan-debt-forgiven-pslf/?ref=/student-loan-forgivness-idr-payment-adjustment/) — have already been made available to student loan borrowers in anticipation of repayment. Last Friday, the department also announced that it would begin canceling $39 billion in loan debt for more than [800,000 borrowers](https://money.com/student-loan-forgivness-idr-payment-adjustment/) who have been making payments for over 20 years will see their remaining balances erased. [Parent PLUS Loans: A Guide to Helping Your Student Pay for College](https://money.com/parent-plus-loans-guide/) [Rejection Rates for Credit Cards, Auto Loans and More Hit Historically High Levels](https://money.com/credit-card-rejection-rates-high/) [4 Things Families Often Get Wrong About College Costs](https://money.com/college-costs-financial-aid-myths/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/student-loan-payments-restarting-monthly-bill-amount/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Everyday Money", "item": "https://money.com/section/everyday-money/" }, { "@type": "ListItem", "position": 3, "name": "Student Loans", "item": "https://money.com/tag/student-loans/" }, { "@type": "ListItem", "position": 4, "name": "Student Loan Payments Are Resuming Soon — Here’s How Much Borrowers Can Expect to Pay" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/student-loan-payments-restarting-monthly-bill-amount/#webpage", "url": "https://money.com/student-loan-payments-restarting-monthly-bill-amount/", "name": "Student Loan Payments Are Resuming Soon — Here’s How Much Borrowers Can Expect to Pay", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-07-19T20:34:25.000Z", "mainEntity": { "@id": "https://money.com/student-loan-payments-restarting-monthly-bill-amount/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/student-loan-payments-restarting-monthly-bill-amount/#breadcrumb" }, "dateModified": "2024-04-17T13:14:22.000Z" }, { "@type": "NewsArticle", "headline": "Student Loan Payments Are Resuming Soon — Here’s How Much Borrowers Can Expect to Pay", "articleSection": "Everyday Money", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/07/News-How-Much-Student-Loan-Borrowers-Payments-Resume.jpg?crop=0px%2C183px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-How-Much-Student-Loan-Borrowers-Payments-Resume" } ], "author": [ { "@type": "Person", "name": "Mary Ellen Cagnassola", "url": "https://money.com/author/mary-ellen-cagnassola/", "@id": "https://money.com/author/mary-ellen-cagnassola/#author", "description": "Mary Ellen (M.E.) Cagnassola is a former reporter at Money, where she covered Social Security, retirement, housing, and employment. Her work reflects her commitment to service and equity in consumer finance.", "image": "https://img.money.com/2023/02/mary-ellen.png?w=350&h=430&crop=1", "alumniOf": "Rutgers University, BA Journalism" } ], "publisher": "https://money.com/#organization", "datePublished": "2023-07-19T20:34:25.000Z", "description": "Half of borrowers will owe more than $200 a month. Some will struggle, but it may be more manageable than many expect, a new analysis says.", "abstract": "Half of borrowers will owe more than $200 a month. Some will struggle, but it may be more manageable than many expect, a new analysis says.", "@id": "https://money.com/student-loan-payments-restarting-monthly-bill-amount/", "inLanguage": "en-US", "dateModified": "2024-04-17T13:14:22.000Z", "editor": [ { "@type": "Person", "name": "Kaitlin Mulhere", "url": "https://money.com/author/kaitlin-mulhere/", "@id": "https://money.com/author/kaitlin-mulhere/#author", "description": "Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more. ", "image": "https://img.money.com/2015/04/Kaitlin-Mulhere.png?w=226&h=247&crop=1", "email": "kaitlin.mulhere@money.com", "jobTitle": "Editor", "alumniOf": "University of Florida", "sameAs": [ "https://twitter.com/KMulhere", "https://www.linkedin.com/in/kaitlin-mulhere-64503048/" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "wordCount": 896, "keywords": [ "News", "Student Loans" ] } ] } ```