When do Student Loan Payments Resume

When do Student Loan Payments Resume

With the federal student loan payment pause about to expire this fall (fall 2023), interest on federal student loans will begin accruing on Sept. 1, and borrowers will be required to start making payments in October.

The US Supreme Court recently blocked President Joe Biden's plan to forgive up to $20,000 in student loan debt. Many Americans will soon have to start making payments again. 

Here's what you need to know about student loan payments resuming and what you can do to prepare.

When happens when student loan payments resume?

The interest-free payment pause, known as forbearance, began as an emergency measure during March 2020 under President Trump. Since then, it has been extended nine times and will expire this fall.

As part of forbearance, borrowers were allowed to temporarily pause their federal student loan payments. This pause typically included both principal and interest payments. For many borrowers, interest on eligible federal student loans was temporarily set at 0% during the forbearance period. This means that interest did not accrue on the loan balance, helping borrowers avoid an increase in their total loan amount.

After several years of not having to worry about loan payments, borrowers will now have to focus on coming up with a repayment plan.

How to prepare for loan payments to resume 

1. Review your loans: Review the details of your loan so you can make the best payment plan. 

2. Locate and contact your student loan servicer. Find your servicer by logging into StudentAid.gov.

3. Determine out your monthly payment: Review your current repayment plan and see if it still works for you. You may want to switch to a different plan that better fits your financial situation.

4. Explore income-driven repayment plans: If you will not be able to make your new monthly student loan payments, look into an IDR plan. The main IDR plans are:

  • SAVE (saving on a valuable education) plan (formerly called REPAYE)
  • PAYE (pay as you earn) plan
  • IBR (income-based repayment) plan
  • ICR (income-contingent repayment) plan

5. Consider whether or not paying your loan down before repayments start works for you

The student loan repayment pause includes a 0% interest rate and 100% of payments made during the pause go toward your principal. If you make extra payments you may be able to reduce the length of the loan and save money in the long run. 

For borrowers enrolled in an IDR plan, paying now could Borrowers enrolled in income-driven repayment might not want to make payments now could help you lower the total interest you owe on top of your principal. However, if you are planning to make payments until the loans are forgiven — usually 20 or 25 years, then you may not want to pay now. 

Additionally, borrowers who qualify for Public Service Loan Forgiveness do not need to make payments until forbearance ends sometime in 2023. 


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