(NEW YORK) -- Jamilla Vanbuckley would like to buy a home one day.
A correctional counselor in New York City, Vanbuckley has been living with her parents and tucking as much money as possible into her savings account. But by late summer, she expects a new expense to enter her monthly budget -- gradually paying off the $68,000 she owes in student debt.
"I'm gonna have to dip into my savings to start paying back on August 29," she said, mentioning the day that payments for direct federal student loans are set to resume. "And now that kind of hinders the goals I had set for myself for the next couple of years."
Vanbuckley is among the 37 million borrowers who have not been required to pay their student loans since March 2020 due to legislative and executive action during the pandemic.
Education Secretary Miguel Cardona confirmed in May that the Biden administration intends to restart student loan payments by 60 days after June 30, a plan later cemented in the government's deal to suspend the debt ceiling.
However, advocates worry that the resumption of payments and the legal challenges to President Joe Biden's plan to cancel up to $20,000 in student debt can result in catastrophic consequences for vulnerable borrowers.
The uncertainty comes amid a change in debt servicing companies for millions of borrowers and staffing shortages that experts see as unprecedented in consumer finance, resulting in logistical headaches, hourslong wait times, and potential communication errors in billing.
"Anyone who has been paying attention to the student loan system sees a train wreck coming, and there's very little time to try to avoid it at this point," said Abby Shafroth, a senior attorney at the National Consumer Law Center and the director of its Student Loan Borrower Assistance Project.
Why is this change happening?
The original pause to student loan payments originated from the early days of the pandemic, according to University of Wisconsin Madison professor Nick Hillman.
Fearing that the sudden spike in unemployment might lead many borrowers to default, the government put millions of federal direct student loans into administrative forbearance and dropped their interest rate to zero percent.
With the end of the federal COVID emergency, the government lost its ability to continue the student loan pause, originally authorized through the Higher Education Relief Opportunities for Students Act of 2003, according to Hillman.
The deal made by congressional Republicans and Biden to suspend the debt ceiling confirmed that student debt payments would resume this summer. With the change, experts worry that the historically low rate of delinquency for student loans will return to the previous high of 10 percent or worse.
"We are anticipating what has been described as a wave of student loan defaults and delinquencies," said Cody Hounanian, executive director of nonprofit Student Debt Crisis Center.
What factors complicate the change?
Without having to pay for student loans over the last three years, many Americans have created strict budgets that do not include a monthly student loan payment, according to Shafroth. With a new monthly student loan bill averaging $160, something in these budgets has to give.
"Leisurely spending is probably gone," Robert Bistoury, a 2020 graduate of Baruch College who said he has $27,000 in student debt, told ABC News.
Both Hounanian and Shafroth worry that borrowers will be cutting into their budgets for rent, medical expenses and food.
"For the majority of people, this is just a new bill that they have to pay, the size of which they may not even realize quite yet," said University of California Irvine professor Dalié Jiménez.
Complicating the resumption of payments is the logistical hurdle of suddenly resuming payments for millions of Americans, which a Department of Education spokesperson described to ABC News as "unprecedented" and "herculean."
Multiple companies that service student loans have left the industry, according to Shafroth, meaning that millions of borrowers will also be dealing with an unfamiliar company that might not have up-to-date contact information for borrowers.
For example, Vanbuckley's student loan servicer switched from Great Lakes Higher Education Corporation, which no longer services student loans, to NelNet -- a transition she described as relatively smooth. Others like Hounanian described a more chaotic switch, including receiving false information from his servicer that needed to be corrected.
Shafroth added that many loan servicers have reduced their staff during the pandemic and will need to hire and train new employees to handle the demand for assistance, further complicated by a smaller-than-desired budget for the Department of Education this year.
Those constraints "may lead to some longer processing times and call hold times than would be ideal for this situation," Scott Buchanan, the executive director of the Student Loan Servicing Alliance, said in a statement to ABC News.
The Department of Education spokesperson told ABC News that it recognizes the return to repayment will result in "significant financial hardship" for borrowers but is committed to helping borrowers.
Perhaps the most significant unknown for borrowers is the fate of the Biden administration's plan to eliminate up to $20,000 in student debt, which is facing a legal challenge in the Supreme Court. On Wednesday, Biden vetoed a bill that would reverse the debt relief program, and the bill faces low chances of a successful override vote in Congress.
"It does give me some anxiety…it is what it is, and I have to budget accordingly," Vanbuckley said about the stalled plan.
Who is most vulnerable?
Experts worry that the shift back to student loan payments places financial hardship on vulnerable Americans and presents an opportunity for bad actors. For borrowers who are still determining how they might pay their monthly student loan bill, some may turn to companies that promise student loan relief but are nothing more than scams that prey on vulnerable consumers, according to Hounanian.
"We know that a lot of companies prey on the confusion and anxiety and stress that people are feeling about their student loans," Shafroth said.
Before the change, experts recommend that borrowers confirm the contact information for their loan servicers and their repayment plan. The Department of Education offers a new income-driven program for borrowers and has discharged loans for borrowers who qualify through public service, disability, or college wrongdoing.
Hillman particularly encouraged borrowers under $20,000 in debt to confirm their servicer and repayment plan, especially given the uncertainty with loan forgiveness.
According to Hillman, while six-figure loans often drive media attention, borrowers with "smaller" loans who never completed their degrees face the highest rate of default.
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