Student loan interest payments restarting but challenges to borrowers are mounting

Federal student loan payments and forbearance plans began accruing interest on Aug. 1, but Black and Brown borrowers face some complications due to the nature of the loan system. Because of that, there is a long list that those at risk of falling behind on payments need to know about.

- By ARIAMA C. LONG Amsterdam News Staff

The U.S. Department of Education restarted the collection process for outstanding loans this month, even vowing to seize wages and tax refunds of nearly 8 million student borrowers if they can't keep up with payments. Interest changes should be reflected in accounts by Aug. 10, 2025.

"Instead of fixing the broken student loan system, [U.S. Secretary of Education Linda] McMahon is choosing to drown millions of people in unnecessary interest charges and blaming unrelated court cases for her own mismanagement," said Student Borrower Protection Center (SBPC) Executive Director Mike Pierce in a statement.

Black and Brown students are already at a disadvantage because of disparities in the student loan system and the racial wealth gap in the U.S. The effects of the accruing interest on their loan payments could be detrimental to future finances, delay life goals like buying a home, or add to money-related stress.

About 60% of "still-indebted" Black student borrowers do not have savings accounts, and Latino borrowers were the most likely to delay getting married and having children due to student loan debt, reported the Education Data Initiative (EDI).

More complicated problems