The White House has announced it’s exploring other ways to implement some kind of student loan forgiveness after Friday’s Supreme Court decision striking down President Joe Biden’s plan to cancel up to $20,000 per borrower.

In the meantime, federal student loan payments will come due again this fall and interest will start accruing again for the first time since the COVID payment pause went into effect three and a half years ago. 

The Department of Education just announced that for the first year after payments restart, borrowers who fall behind won’t be penalized.

More than 43 million people have federal student loans and most haven’t had to pay them since the spring of 2020. 

“We’ve taken all these people that were in the habit of making their payment out of the habit,” said Betsy Mayotte at the nonprofit Institute of Student Loan Advisors. She says that’s one reason she’s been concerned that the number of people who go into delinquency or default might spike when payments restart. 

“And then to add sort of insult to injury things are a lot more expensive today than they were in March of 2020,” said Mayotte.

Plus she says millions of people’s loans have changed servicers in the last few years.

“So there may be people that may not even be aware of where their loans are. So that might cause some delinquencies as well,” she explained.  

That’s why Abby Shafroth at the National Consumer Law Center says it’s significant that the Department of Education has this plan to try to smooth the transition.

“Interest will be charged to borrowers accounts and … bills will be sent out. But if borrowers miss their payments, or there’s confusion, they pay the wrong amount … their credit reporting won’t be impacted, they won’t be put into delinquent or default status, and they won’t face late fees or collection costs or anything like that, as a result,” said Shafroth.

In addition she says the Biden administration has made a bunch of other changes aimed at making it easier for people to keep up. 

Those include a new income-based repayment plan that will reduce borrowers’ monthly payments and eliminate unpaid interest so that people’s loans don’t just keep growing even when they’re actively paying them back.

Fenaba Addo at the University of North Carolina, Chapel Hill, says that’s a big deal, especially for low-income borrowers.

“It does sound like many of the people who have been working on this issue within the Biden administration have been listening to where the issues have arisen in the repayment process with regards to tripping people up in their ability to pay down those debts,” said Addo.

Another change that just went into effect: Anyone who took out $12,000 or less in student loans will now have their balance forgiven after 10 years, instead of 20. 

Correction (July 3, 2023): A previous version of this story misspelled one reference to Fenaba Addo’s name.