After three years of the COVID-19 relief, the U.S. Department of Education’s Federal Student Aid office announced that federal student loan repayments will resume in October 2023 with interest beginning to accrue in September 2023. Borrowers will receive notices with their payment amounts and due dates at least 21 days before payments resume and they are encouraged to start preparing now.
What do borrowers need to do?
To protect the most vulnerable borrowers, a 12-month “on-ramp” will also be created starting on October 1, 2023. While payments will be due and interest will accrue during this period, interest will not capitalize at the end of the on-ramp period. Additionally, borrowers will not be reported to credit bureaus, considered in default, or referred to collection agencies for late, missed, or partial payments during the on-ramp period.
If the borrower can’t afford to resume student loan repayments, forbearance or deferment (opens new window)
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may be an option to temporarily lower or pause the payments.
Are you trying to manage your student debt, save for the future, or get a handle on your other financial obligations? We can help. Learn how to create a budget that works for you with our Money Basics Guide to Budgeting and Savings.