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?

Recommended Action Instructions
Update contact information. Update contact information on StudentAid.gov and the Federal student loan servicer’s website.
Explore affordable repayment plans. Compare repayment plans with Loan Simulator; if an income-driven repayment (IDR) is more affordable, consider applying for it.
If on an income-driven repayment (IDR) plan, consider recertifying early. In case of changes in income or family size, recertify the IDR plan. Normally, recertification has to be done each year.
Enroll (or reenroll) in autopay. With autopay, borrowers will save 0.25% on interest rates.
Find out the monthly payment amount. Find the Federal student loan servicer who services the borrower’s loan(s).
Make the payment. Make sure the linked bank account has sufficient funds by the due date.
Check the eligibility for loan forgiveness. There are forgiveness options for people who work in public service, can’t pay due to a disability, and who were defrauded by their school.

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 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.