For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Written By Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Personal Finance Writer Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
| Mortgages and Student Loans Deputy Editor
Updated: Oct 12, 2023, 12:11pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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After three payment-free years, 28 million student loan borrowers began repaying their loans in October as the federal student loan payment freeze came to an end.
Whether this is the first time you’ll be paying off your loans or you’ve been in repayment for years, you may be dreading your loan due dates.
However, you can prepare for student loan repayment by understanding when payments will start and what you can do to make your payments more affordable.
Since March 2020, federal student loan payments have been frozen; no payments were due, and interest rates on outstanding loans were temporarily set at 0%.
After several extensions, the federal payment freeze ended on October 1, 2023, and borrowers must restart repaying their loans.
The end of the federal student loan pause occurred in stages. Interest began accruing on outstanding loans as of September 1, 2023.
On October 1, loan servicers reset accounts and payments became due.
Not everyone has a due date on the first of the month; your payment due date varies based on your loan terms and payment plan, so check with your loan servicer to find out when your first payment is due.
For the past three years, interest didn’t accrue on existing federal student loans since interest rates were set at 0%. Now that the payment freeze is over, interest rates will return to their original levels and begin accruing again.
According to the Federal Student Aid Office, as interest accrues on your balance, your servicer may be required to increase your monthly payment to ensure your loans are paid off on time.
If you’re enrolled in an income-driven repayment (IDR) plan, your payment is solely based on your discretionary income.
Important: With the new Savings on a Valuable Education (SAVE) plan, the government covers the excess interest. If your payment under SAVE doesn’t cover all of the accrued interest, the government waives the remaining amount each month.
If you have outstanding federal student loans impacted by the payment freeze, you’re automatically eligible for the temporary on-ramp period.
The on-ramp period lasts through September 30, 2024 and lessens the consequences of missing payments so borrowers can adjust to repayment. During this period, missed, late or partial payments won’t be reported to the credit agencies.
To find out how much you owe—or to see what your payments would be under the different repayment plans available—use the loan repayment simulator tool. You can also contact your loan servicer to find out how much you owe and when your payments are due.
You’ll make payments to your loan servicer and who you contact for questions. You may have a different loan servicer than before; the Consumer Financial Protection Bureau reported that about 40% of borrowers will have different loan servicers when repayment resumes.
To manage your loans and make a payment, you must first find out who your loan servicers are and what loans they handle. To do so, you can use your Federal Student Aid information to log into your account at studentaid.gov. You can also call the Federal Student Aid Information Center at 800-433-3243.
Once you’ve found your loan servicers, you can create an online account, view your loan details and set up automatic payments.
Under typical circumstances, defaulting on your federal student loans is a serious issue with lasting consequences. When you default on your loan, the loan servicer can send your debt to collections, garnish your wages, seize your tax refund and report the negative activity to the credit bureaus.
But the government, recognizing that borrowers haven’t made payments in three years and may need time to adjust, is helping borrowers ease into repayment by providing an “on-ramp period.” During this period, borrowers are encouraged to make their required payments if they can afford it. But the consequences aren’t as severe if you can’t and miss a payment on your student loans.
If you miss a payment or make a partial or late payment, the loan servicer won’t garnish wages, send your account to collections or report the credit bureaus during the first year. However, interest still accrues and the missed payments won’t count toward the necessary number of payments needed for loan forgiveness.
Student loan forgiveness remains a hot topic and more borrowers are researching forgiveness options now that their loans have entered repayment. Depending on your loan and employment type, you may be eligible for federal loan forgiveness or discharge programs.
Although the Supreme Court struck down President Biden’s student loan forgiveness plan, federal loan borrowers may still be eligible for other loan forgiveness programs.
Federal loan forgiveness programs include:
Due to the federal payment freeze, if you’re on a payment plan that qualifies you for forgiveness, you’ll automatically receive credit for the three years of payments that were suspended toward the payments needed to qualify for loan forgiveness.
As a federal student loan borrower, the default repayment plan for your loans is a 10-year standard repayment plan with fixed monthly payments. However, there are several repayment options if your monthly payment under a standard repayment plan is too high:
Federal Direct loan borrowers may qualify for an IDR plan and a lower monthly payment. IDR plans use a percentage of the borrower’s discretionary income to calculate monthly payments, and some people will qualify for a payment as low as $0. However, making lower payments doesn’t mean your loan balance will decrease since you’re still accruing interest.
If the borrower makes payments for the new plan’s term and still has a balance at the end, the government will forgive the remainder.
There are four IDR plans:
