After more than three years, federal student loan payments have restarted. A lot of new changes have been enacted, such as changes to income-driven repayment (IDR) and loan forgiveness, and some actions are still in the pipeline.
Here’s what’s happened so far – and what’s still to come – for student loan borrowers.
Summer 2023: New SAVE Plan Revealed
What Happened
The Department of Education announced changes to its federal income-driven repayment plans. The Saving on a Valuable Education (SAVE) plan was introduced, replacing the current Revised Pay As You Earn (REPAYE) plan.
Partial benefits under the new repayment plan went into effect before the payment pause ended. This includes benefits that dramatically lower your monthly payment, subsidize any interest that isn’t covered by your payment, and exclude your spouse’s income for your payment calculation.
If you’re already enrolled in REPAYE, your plan should have been automatically enrolled in the new SAVE plan.
Who’s Impacted (and Who Isn’t)
Borrowers who are already under the REPAYE plan, or are interested in getting on the SAVE plan. (If you’d like to be enrolled in SAVE, you can enroll now at StudentAid.gov.)
This doesn’t affect borrowers who are on an alternative repayment plan, or those on an IDR plan who don’t wish to enroll in SAVE.
September 1, 2023: Interest Accrual Resumes
What Happened
The COVID-19 administrative pause officially ended on August 31, and interest charges on federal loans resumed on September 1.
Also, you may have received your student loan bill in September (including the payment amount and its due date), as bills were set to be sent at least 21 days before your payment is due.
Who’s Impacted (and Who Isn’t)
All borrowers with federal student loans that were included in the interest rate pause.
This date didn’t affect student loans that were ineligible for the payment and interest pause. That includes private loans and Federal Perkins Loans and Federal Family Education Loans (FFEL) that weren’t owned by the Department of Education.
One thing to keep in mind: During the payment pause, some companies left the federal loan servicing business while new ones were brought into the fold. If you haven’t already, confirm whether your federal loan servicer has changed by logging into your StudentAid.gov account or calling 1 (800) 433-3243 for assistance.
After confirming who your servicer is, create an online account on the servicer’s website to manage your repayment moving forward.
October 1, 2023: First Payments Due
What Happened
Your first payment is due in October, based on the due date stated on your loan bill. However, borrowers who graduated after March 1, 2023 will receive a full six-month grace period before their first payment is due. That means that, for instance, undergraduates who graduated in May 2023 will begin making payments in December 2023.
Who’s Impacted (and Who Isn’t)
Borrowers who left or graduated school before March 1, 2023, and who have an unpaid federal student loan balance. This doesn’t apply to federal borrowers who had non-government held Perkins or FFELs which weren’t included in the emergency forbearance action.
What You Need to Do to Prepare
If you haven’t received your bill yet, log in to your servicer’s website to access your loan to review your payment amount and due date. If you were previously enrolled in auto-pay before the pause, you’ll need to re-enroll in automatic payments through your loan servicer’s site.
💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.
April 30, 2024: Last Day to Consolidate for IDR Adjustment
What’s Happening
This is the deadline to consolidate non-qualifying loans into a Direct Consolidation Loan to claim the one-time, temporary IDR Account Adjustment. Claiming this adjustment helps eligible borrowers get credit for past non-qualifying payments.
Borrowers who consolidate their non-qualifying loans by this time can accelerate their track toward loan forgiveness. Generally, if after the adjustment is applied, you made more qualifying payments than needed for loan forgiveness, you’ll have the amount refunded.
Who’s Impacted (and Who Isn’t)
Borrowers who are or were enrolled in an IDR plan, as well as borrowers who are participating in Public Service Loan Forgiveness (PSLF). Also, borrowers aren’t on an IDR plan yet, but want to enroll in one and have government-held Direct or FFEL Loans.
What You Need to Do to Prepare
Don’t wait until the last minute to consolidate your non-qualifying loans. Contact your federal student loan servicer ASAP to get the process started. If your non-qualifying loan is in default, you can still access this adjustment by getting your loan out of default (for instance, through Fresh Start ).
July 2024: Additional SAVE Plan Benefits Available
What’s Happening
The second wave of SAVE plan benefits start in July 2024. Some key benefits are even lower monthly payments, and an accelerated track toward loan forgiveness.
Borrowers who are only repaying undergraduate loans on the SAVE plan will have their monthly payment reduced from 10% of their discretionary income to only 5%. Those with a mix of undergraduate and graduate loans under SAVE will pay a weighted average between 5% to 10% of their discretionary income.
Additionally, borrowers whose original principal loan balance was $12,000 or less will have any remaining loan balance forgiven after making 10 years of repayment — a much faster timeline than SAVE’s usual 20- or 25-year forgiveness period.
Who’s Impacted (and Who Isn’t)
Borrowers who are enrolled in the SAVE plan, or are interested in getting on the SAVE plan. This doesn’t affect borrowers who are on an alternative repayment plan, or those on an IDR plan who don’t wish to enroll in SAVE.
What You Need to Do to Prepare
Make sure your contact information is up to date with your loan servicer so you receive announcements as this date nears. If you want to take advantage of these benefits, but aren’t enrolled in an IDR plan, submit an IDR request to your servicer to see if you qualify for SAVE.
September 30, 2024: End of “On-Ramp” Transition
What’s Happening
The Department of Education is enacting a 12-month “on-ramp” phase from October 1, 2023 to September 30, 2024. During this time, loan accounts that don’t receive a payment won’t be penalized, and although interest will accrue, it won’t capitalize after the on-ramp expires. However, after this date, student loans that are past due on a payment will be reported to the credit bureaus, marked as delinquent or in default, and the account might be sent to debt collection.
Who’s Impacted (and Who Isn’t)
Student loan borrowers who have not made a payment since the restart of federal student loan interest and payments, and borrowers who are struggling with their student loan payment.
What You Need to Do to Prepare
No action is necessary to participate in the on-ramp. However, reach out to your loan servicer if you can’t meet your loan obligation before this date to learn about your options to avoid severe consequences.
For example, you might be able to secure a lower payment under an IDR plan or qualify for temporary deferment or forbearance.
The Takeaway
In the last few years, there have been many changes to help borrowers with federal student loan repayment. However, the many different deadlines and moving parts can make staying on top of your to-do list challenging.
Keeping these dates in your calendar can help you track, and take advantage of, valuable federal programs.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Are student loan payments going to start?
Yes. Interest on federal student loans that were paused during the COVID-19 administrative forbearance will resume on September 1, 2023, and payments will be due in October 2023.
Is Biden going to pay student loan debt?
Certain federal student loan borrowers might have all or a portion of their remaining unpaid student debt canceled. A new administrative action is being put into place to recalculate payment credit toward loan forgiveness for 804,000 borrowers who are enrolled in an income-driven repayment plan.
The administration’s plans to cancel up to $20,000 of federal student loans for eligible borrowers, however, was struck down by the Supreme Court. No further forgiveness actions have been announced as of this writing.
How do I find out if my student loans have been forgiven?
If you received loan forgiveness as a result of recent changes in the federal student loan system, you’ll receive a notice from your loan servicer or the Department of Education.
This might be sent via mail or electronically. Ensure that you can log in to your StudentAid.gov or servicer’s website, and your mailing address and email are correct.
Photo credit: iStock/FatCamera
SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
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