Regardless of SCOTUS decision, 25 million people will have to repay student debt. Here’s how to prepare.

Whatever happens to President Joe Biden’s student loan forgiveness plan currently at the Supreme Court, at least 25 million people will still have student debt to repay.

That’s because of the roughly 45 million people who hold student debt, Biden said about 20 million would have their debt completely erased if his plan is upheld by the Supreme Court, leaving 25 million who would still have to make some payments.

So, those millions of people should prepare (and quickly) to start paying again, experts say.

Student loan payments are expected to resume either 60 days after the Supreme Court issues a decision on the relief program, or 60 days after June 30 – whichever comes first. That means repayment is likely to start this summer or fall.

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The average borrower has around $38,000 in loans and will still need to make payments even if the current forgiveness plan goes into effect, according to a recent survey from Highway Benefits, an employee benefits platform company. The survey also showed that 89% of student debt holders said they weren’t ready to restart payments, and that 27% said one-third of their income will go towards their loans.

With the cost of living climbing amid challenging economic times, borrowers need to prepare as soon as possible.

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“If you’re just now starting to think about it, I might even say you’re pushing the envelope of being too late,” said Derek Pszenny co-founder and managing partner at Carolina Wealth Management.

How many Americans with student debt does this affect?

A simple debt forgiveness application was launched around mid-October.

About 26 million Americans had already applied for forgiveness and 16 million people already received debt relief approval when the Department of Education stopped taking applications on Nov. 11, the day after a federal judge in Texas declared the debt forgiveness plan unlawful. Two cases against student debt relief are being heard now at the Supreme Court.

The White House estimated over the summer that up to 43 million federal loan borrowers, including roughly 20 million borrowers who would have had their full remaining balance canceled, would have been eligible for relief. Around 45 million Americans have student loans, collectively worth $1.75 trillion.

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What is the income limit for student loan debt forgiveness?

The administration’s plan, announced last summer, would have canceled $10,000 in federal student loans, including Parent Plus loans, for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.

What should people do to prepare to start repaying again?

There’s not a lot of time between now and when the pause on student debt repayments may end this summer or fall. So people should use it wisely and  “get their financial house in order,” said Brian Marks, executive director of the Entrepreneurship and Innovation Program at the University of New Haven in Connecticut.

Here are some steps to consider:

• Start cutting expenses and increasing savings or maybe take on extra work. “With 3.4% unemployment, try to find a part-time job to come up with the extra money,” Pszenny said. “That may be the answer people really don’t want to hear, but it might be the answer they need to hear.”  

• Put into a savings account the money you would need each month for your student loan repayment, so it’s earning a little interest until it has to be used.

• Save a portion of your payment and increase the amount, or taper the loan payment into your budget, each month, if you can’t put away the full payment amount each month, Pszenny said. For example, you can save 25% of your loan payment the first month, then 30% the next, followed by 35% and so on. “Then when you start paying, you can pay some from savings and some from your income,” he said. “That buys a full year of partial payments from your paycheck and savings to get your full payment into your budget.”

• Know what your payments will look like and whether you’ll be able to afford them. If not, and if you don’t qualify for forgiveness, it may make sense to refinance at a lower interest rate if possible before payments restart, Randy Lupi, financial professional with Equitable Advisors, said. Just note, though, that once loans are refinanced with a private company, they will no longer be eligible for any federal forgiveness programs, he said.

• Check your eligibility for other government loan forgiveness programs. “For example, individuals in the non-profit field likely qualify for Public Service Loan Forgiveness, which does not have a cap on the amount of forgiveness and should take this time to make sure they are properly enrolled,” Lupi said.

• Consider paying your loan down before repayments start. Because the student loan repayment pause includes a 0% interest rate, 100% of payments made during the pause go toward your principal, said Eric Schuppenhauer, head of national banking and lending at Citizens Bank. If you trim your loan amount, you may be able to cut the length of the loan and save money in the long run.

• Check your eligibility for income-driven repayment plans. Federal student loans offer income-driven repayment plans that can reduce your monthly payments.

• Check with your employer. For example, Aetna matches employees’ U.S.-based student loan payments up to $2,000 a year for a lifetime maximum of up to $10,000 for qualifying loans; PwC offers associates and senior associates up to $1,200 a year toward student debt; and Google matches up to $2,500 a year.

Separately, Secure Act 2.0 passed late last year also allows companies to match their employee’s student loan payments with retirement contributions, so employees don’t have to choose between paying off student debt and saving for retirement.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: Student loan payments to restart for millions. Here’s how to get ready