After a three-and-a-half-year hiatus, federal student loan payments recommenced in October 2023, with interest accruing since September 1. For those who missed the October payment, a 12-month “on-ramp” until September 30, 2024, offers a safety net against default, though interest continues to accumulate. President Biden emphasizes the importance of meeting monthly obligations to prevent credit repercussions.
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Student Loan Payments Resume
Federal student loan payments resumed in October, ending a three-and-a-half-year pause. Interest started accruing on September 1, 2023. If you missed your October payment, there’s a 12-month “on-ramp” until September 30, 2024, preventing default but allowing interest accumulation. President Biden encourages timely payments to avoid credit harm during this transitional period.
The student loan payment pause was first implemented in March 2020 as a response to the COVID-19 pandemic. It has been extended several times since then, but Congress did not approve another extension in June 2023.
Payments on student loans will start up on October 1st, 2023. Interest on federal student loans will start accruing again on September 1, 2023.
The student loan payment pause was first implemented in March 2020 as a response to the COVID-19 pandemic. It has been extended several times since then, but Congress did not approve another extension in June 2023.
The resumption of student loan payments is expected to have a significant impact on the economy. The Federal Reserve Bank of St. Louis claims, the total amount of outstanding student loan debt in the United States is over $1.6 trillion.
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How much will your student loan payment be?
The amount of your student loan payment will depend on a number of factors, including the type of loan you have, the amount you borrowed, and the repayment plan you are on.
If you are on a standard repayment plan, your payment will be calculated based on the amount you borrowed and the length of your repayment term. If you are on an income-driven repayment plan, your payment will be calculated based on your income and family size.
You can use the Federal Student Aid repayment estimator to get an estimate of your monthly student loan payment.
How can you prepare for the resumption of student loan payments?
Here are a few tips for preparing for the resumption of student loan payments:
- Review your budget: Take some time to review your budget and see how much money you can afford to allocate to student loan payments each month.
- Update your contact information: Make sure your loan servicer has your current contact information so that they can send you important information about your loans.
- Explore your repayment options: If you are struggling to afford your student loan payments, there are a number of repayment options available to you. You can contact your loan servicer to learn more about your options.
What if you can’t afford student loan payments?
If you are struggling to afford your student loan payments, there are a number of things you can do:
- Contact your loan servicer: Your loan servicer can help you explore your repayment options and find a plan that works for you.
- Consider an income-driven repayment plan: Income-driven repayment plans cap your monthly payment at a percentage of your income. This can make your payments more affordable if you are struggling to make ends meet.
- Apply for deferment or forbearance: If you are experiencing a temporary financial hardship, you may be able to apply for deferment or forbearance. Deferment and forbearance put your loans on hold for a period of time, but interest will continue to accrue on your loans while they are in deferment or forbearance.
- Consider consolidation or refinancing: Consolidation and refinancing can help you lower your monthly payment by combining multiple loans into one loan with a lower interest rate.
What are the resources available to help you with student loans?
There are a number of resources available to help you with your student loans. Here are a few:
- Federal Student Aid: Federal Student Aid is a website operated by the U.S. Department of Education that provides information about all aspects of federal student loans, including repayment options.
- National Student Loan Data System (NSLDS): The NSLDS is a database that contains information about all federal student loans. You can use the NSLDS to find out who your loan servicer is and how much you owe on your loans.
- Student Loan Ombudsman: The Student Loan Ombudsman is an independent office that can help you resolve disputes with your loan servicer.
If you have any questions or concerns about student loan payments, be sure to contact your loan servicer or Federal Student Aid.
Additional tips for managing your student loans
Here are a few additional tips for managing your student loans:
- Make more than the minimum payment: If you can afford to make more than the minimum payment on your student loans, you will pay off your loans faster and save money on interest.
- Set up automatic payments: Setting up automatic payments can help you avoid missing a payment and incurring late fees.
- Make extra payments when you can: If you have extra money at the end of the month, consider making an extra payment on your student loans.
- Refinance your debt: If you have good credit, you might be able to get a better deal on your student loans. You may be able to lower your monthly payments and interest costs by doing this.
Student loan payments can be a challenge, but there are a number of things you can do to make them more manageable. By following the tips above, you can develop a plan to pay off your loans and achieve your financial goals.
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