Student loan repayments start again this October, putting an end to the longstanding pause that was put in place at the start of the pandemic in 2020. Here’s what you need to know about the government's on-ramp program for people who have borrowed federal funds for education.
Starting on Sept. 1, student loans will once again begin accruing interest for the first time since March 2020.
Americans with student loans will then have to start making payments in October, according to the Department of Education, though it has yet to give specifics on the dates and they could vary.
“We will notify borrowers well before payments restart,” StudentAid.gov says on its website.
While last-minute repayment pause extensions are no longer on the table, President Biden is working to lower payments and give borrowers flexibility in how they pay off their debt.
One plan Biden has to make it easier on borrowers is what he called a 12-month “on-ramp transition period” for borrowers who aren’t able to make regular monthly payments on the loans. The plan says if payments are missed for up to 12 months after they restart, borrowers won’t fall into default, but interest will accrue during those first 12 months.
“During this period, if you can pay your monthly bills, you should,” Biden said in a press conference. “But if you cannot, if you miss payments, this on-ramp temporarily removes the threat of default or having your credit harmed, which can hurt borrowers for years to come.”
The Supreme Court struck down the president’s sweeping debt relief program in June, and Biden has since said that he is pursuing a second option for debt relief, though that could be months or even a year from happening.
President Biden agreed to stop the extension of the payment pause while discussing the debt ceiling with the Speaker of the House.
Now, millions of Americans will begin making payments this fall. For many, it has been some time, or for those who have recently graduated, it’s completely new, and StudentAid.gov shares that there are several ways for borrowers to repay their loans.
“Federal student loans offer flexible repayment plans, loan consolidation, forgiveness programs, and more,” the site says. “We can help you manage repayment and answer any questions you have along the way.”
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