Minnesotans are readjusting their budgets as they prepare to restart student loan payments that were paused during the pandemic, even as they wait to see if a portion of their debt will be forgiven.

More than 775,000 Minnesotans have student loan debt totaling $27 billion combined. The pause on payments during the pandemic gave many of them a glimpse at what life would look like with hundreds of dollars more per month to go toward housing, cars, savings or other items. But payments will come due again later this summer.

And more than half a million Minnesota borrowers are still waiting to learn whether a significant portion of their debt — up to $20,000 for some — will be forgiven or whether the U.S. Supreme Court will toss out the Biden administration program.

"I'm eagerly awaiting more clear updates," said Kristina Oak, who graduated from St. Olaf College in Northfield with about $84,000 in student debt.

Oak, a first-generation college student who graduated in 2013, studied social work but switched to the food and beverage industry.

"I knew those loans were coming due in a few months, and I would need to make more money than an entry-level social worker," she said.

Oak pays about $825 per month in students loans, and $177 of that is eligible for forgiveness, if the program is upheld. Without it, she'll likely have to abandon "my meager attempts at getting a savings account."

Here's the latest in the political and legal fight over student loan payments:

Why were student loan payments paused?

Shortly after the first COVID-19 cases were recorded in the United States in March 2020, then-President Donald Trump paused payments on federal student loans, citing the economic hardships caused by the pandemic. The plan also temporarily set interest rates at 0%.

President Joe Biden's administration extended the pause multiple times and unveiled a separate plan to forgive up to $20,000 in federal student loans for borrowers making less than $125,000 per year.

When do payments resume?

While crafting a deal to suspend the debt ceiling, federal officials agreed to end the pause on student loan payments. The deal calls for payments to resume and interest to begin accruing again on Aug. 29. The U.S. Department of Education says borrowers should receive a statement at least 21 days before their payments are due. The notice should include both the due date and the required payment amount.

Will my loans be forgiven?

It's not clear yet. Both the U.S. House and Senate have passed a resolution aiming to overturn the Biden administration's plan to forgive up to $20,000 in federal student loan debt. Biden vetoed that resolution, and Congress doesn't appear to have the votes to overturn it.

So, many people tracking the issue are focusing attention on the U.S. Supreme Court. The court heard arguments earlier this year in two lawsuits challenging the legality of the program. The justices could issue a ruling any day.

What if I can't afford to pay?

The federal government offers different loan forgiveness programs, including some for people working for government agencies or nonprofits.

The U.S. Department of Education says some people may be able to lower their monthly payments by applying for an income-driven repayment plan, which factors in borrowers' salaries and the size of their families. It recommends that borrowers who aren't eligible for the program reach out to their loan servicers.

More detailed information on each of those programs is available at studentaid.gov/announcements-events/covid-19.

Staff writer Hunter Woodall contributed to this report.

The Star Tribune is continuing to report on student loan debt and looking for Minnesotans who are willing to talk about how that has affected their lives. If you're interested or would like to learn more, please include your contact information in the form below.

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