When Will Borrowers Receive Student Loan Bills?
The U.S. Department of Education will start expecting payments again, and borrowers will receive their first student loan bill in September or October, giving them at least 21 days before the official due date, CNBC reported.
Although the federal student loan payments won’t be due until October, interest will begin accruing on September 1, according to the Education Department. This marks the end of the suspension of interest accrual on most federal student loans, which had been in effect since March 2020.
The specific due dates for borrowers may vary based on their account details, including their payment schedule before the COVID-19 pandemic. Borrowers can find their exact due dates by contacting their loan servicer or logging in to StudentAid.gov.
Recent graduates still in their grace period may have even more time before repayment starts. Grace periods typically last six months from graduation. Additionally, the Education Department will implement a 12-month “on-ramp” to repayment from October 1, 2023, to September 30, 2024.
“On-Ramp” Period On Student Loan Bills
During this on-ramp period, borrowers will be protected from the severe consequences of missed payments. Loans will not go into default, delinquencies will not be reported to credit agencies, and late fees will not be charged. This on-ramp is similar to a forbearance, with one significant difference: interest will continue accruing on the debt while payments are not made.
Experts advise borrowers to start repaying their loans if they can, as allowing interest to accumulate without payments will eventually be detrimental to their financial situation.
Consumer advocates emphasize the importance of this leeway, stating that many borrowers are not yet ready to resume payments due to the lingering financial fallout from the pandemic, even if the virus risk has diminished. As borrowers prepare to face student loan bills again, they may need to adjust their budget and financial planning to meet these new obligations.