The pause on federal student loans is ending, and student loan payments restart in October, marking the first time borrowers will be required to make monthly loan payments since the pandemic. Amid this change, some individuals have contemplated the prospect of student loan forgiveness while making college decisions, aiming to alleviate the burden of long-term debt.
Student Loan Payments Restart
According to WTWO, starting in October, student loan payments restart as the federal pause on student loans ends. Interest has resumed accruing since September 1, coinciding with the conclusion of COVID-19 relief measures. Some borrowers approved for loan forgiveness must also restart payments.
An income-driven repayment program, the ‘SAVE’ plan, offers alternatives, potentially reducing monthly payments or setting them to zero, though interest continues. Additionally, as student loan payments restart, a 12-month “on-ramp” from October 1, 2023, to September 30, 2024, provides relief for borrowers missing payments, without impacting credit.
Regularly checking with loan servicers is advised, and early budgeting is essential for new college students preparing for the student loan payments restart.
More Details About Student Loan Payments Restart
According to the report from CNN, the student loan payments restart means that unless borrowers made optional payments or account changes, their payments will return to the same amount as before the pause. Typically, borrowers enrolled in income-driven repayment plans, which adjust payments based on income and family size, need to recertify their income annually. However, income recertification was not required during the pause and won’t be until at least March 2024, as per the Department of Education.
Notably, as the student loan payments restart, some borrowers will have different loan servicers handling their payments compared to when the payment pause began in March 2020. For example, FedLoan and Navient have ended their contracts with the Department of Education, transferring loans to other servicers.
The government has also made some changes to federal student loan forgiveness programs and eligibility criteria. However, comprehensive student loan forgiveness programs are still in the works and may take time to materialize.