After several years of paused payments and 0% interest, the COVID-19 emergency forbearance on federal student loans has ended. Interest started accruing again in September 2023, and payments became due in October.
If you (understandably) haven’t checked in with your loans in a while, it’s time to get your ducks in a row: review your balances, find out who your loan servicer is, and mark your payment due dates in your calendar.
Here’s some advice on how to start paying your student loans again, including your various options for student debt repayment.
When are payments restarting for student loans?
When the pandemic began, the federal government paused payments and interest on federally-held student loans in response to the coronavirus pandemic. This emergency forbearance was extended several times but ended in September 2023.
In September, interest started accruing again at its previous rates. And in October, borrowers were again on the hook for monthly student loan payments.1 Payment due dates vary, so log into your account at Federal Student Aid or contact your student loan servicer to find yours.
Understanding the student loan on-ramp
If you’re concerned about affording your payments, you may be relieved to hear there’s a one-year “on-ramp” for student loan repayment. From Oct. 1, 2023, to Sept. 30, 2024, missing payments won’t lead to delinquency, default, or collections. The Department of Education also says it won’t report missed payments to the credit bureaus.2
However, missed payments or an increasing debt balance could still affect your credit score. What’s more, interest will keep accruing on your loans, and you won’t make any progress toward loan forgiveness under the Public Service Loan Forgiveness program or another plan.
While the student loan on-ramp gives you some wiggle room, it’s better to pay your student loans if you can afford it.
How to start paying your student loans again
After a lengthy hiatus on student loan repayment, you may need help figuring out what to do next. Here are the steps you can take to start repaying your student loans:
- Review your balances. Sign into your Federal Student Aid account with your FSA ID and re-familiarize yourself with your loan details, including your balances, interest rates, and monthly payments.
- Find out who your loan servicer is. Your Federal Student Aid account should also list your loan servicer, which may have changed since you last checked. If your personal details have changed, too, make sure to provide your loan servicer with your updated contact information.
- Consider signing up for autopay. Autopay means your loan servicer can automatically withdraw your student loan payments from your bank account on the due date. Opting in will score you a 0.25 percentage point discount on your interest rate.2 If you used autopay in the past, you might have to re-enroll, as it won’t necessarily roll over. If you don’t want to pay via automatic withdrawals, you’ll have to make a payment on your loan servicer’s website manually.
- Review your repayment plan options. Federal student loans are eligible for various repayment plans, including the standard 10-year plan, extended repayment, graduated repayment, and income-driven repayment plans. This Loan Simulator tool can help you compare your monthly payments and long-term interest costs on different plans.
- Sign up for Fresh Start if you have loans in default. Anyone with federal loans in default can get them back into good standing by signing up for Fresh Start, a one-time temporary program from the Department of Education. You can enroll at myeddebt.ed.gov or by calling 1-800-621-3115 (the TTY number is 1-877-825-9923). Not only will Fresh Start get your loans out of default, but it will also remove the default from your credit report and restore your access to federal financial aid.3
Student loan forgiveness update
While the Biden-Harris administration introduced a plan to forgive up to $20,000 in student loans in 2022, the Supreme Court struck it down in June 2023. Six of the nine justices ruled in favor of the opposing states, which said that the HEROES Act of 2003 didn’t give the Secretary of Education authority to cancel that much student debt.4
Student loan committee deciding new plan for debt relief
The Biden-Harris administration has indicated that it will pursue student debt cancellation again, seeking authorization through the Higher Education Act of 1965. The Department of Education has set up a Student Loan Debt Relief Committee to discuss a new debt forgiveness proposal between October and December.5
However, whether the committee will propose similar student debt relief as before or something new is unclear. At this point, the Department of Education has shared that it will prioritize relief for low-income borrowers, as well as for those who owe more than they borrowed, attended programs that didn’t provide sufficient financial value, or have other hardships.6
Some borrowers have received loan forgiveness through PSLF and other programs
That said, the Biden-Harris administration has approved loan forgiveness for targeted populations.
The administration recently approved $9 billion in debt relief for 125,000 Americans who qualify for forgiveness under income-driven repayment plans, the Public Service Loan Forgiveness program, and total and permanent disability discharge. In total, the administration has approved $127 billion in loan forgiveness for almost 3.6 million borrowers.7
Options for student debt repayment
In August 2023, the Biden-Harris administration introduced a new income-driven repayment plan called the Saving on Valuable Education plan, or SAVE. This plan, which replaces Revised Pay As You Earn (REPAYE), may offer the most affordable monthly payments for borrowers because it calculates discretionary income and covers unpaid interest charges.8
Starting in July 2024, the SAVE plan will:
- reduce payments on undergraduate student loans to 5% of your discretionary income.
- offer loan forgiveness after just 10 years for borrowers with original principal balances of $12,000 or less (the timeline increases by one year for each additional $1,000 borrowed, for a maximum term of 20 or 25 years).
By contrast, the other income-driven plans:
- use a less generous calculation for discretionary income.
- adjust your payments to 10%, 15%, or 20% of your income.
- have terms of 20 or 25 years.
However, every borrower’s situation differs, so it’s worth exploring your repayment options to see which is best for you.
Repayment plans for federal student loans include:
- Standard plan, with fixed payments over 10 years.
- Graduated plan, which spans 10 years and calls for payments that start smaller and increase over time.
- Extended plan, with fixed or graduated payments over 25 years.
- Income-driven repayment plans, which include SAVE, Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment.
You can also combine your federal loans into a Direct consolidation loan. After consolidating, you can choose any repayment plan or a term of up to 30 years, depending on your loan amount.
Student loan forgiveness programs
Government-sponsored programs offer student loan forgiveness for those with specific qualifications.
One of the most popular federal student loan forgiveness options is the Public Service Loan Forgiveness (PSLF) Program, which promises forgiveness of federal student loans to government and qualifying nonprofit employees. Eligible borrowers can have their remaining loan balance forgiven after making 120 qualifying loan payments.9
Some other loan forgiveness programs to look into include:
- Teacher Loan Forgiveness Program –Teachers employed full-time in low-income public elementary or secondary schools may be eligible for Teacher Loan Forgiveness after working for five consecutive years. If you qualify for this relief, you can receive up to $17,500 in loan forgiveness, depending on your teaching subjects.10
- Nurse Corps Loan Repayment Program – If you’re a licensed registered nurse, an advanced practice registered nurse, or a nurse faculty member with qualifying nursing debt, you may be eligible for the Nurse Corps Loan Repayment Program. This program pays up to 85% of qualified nurses’ unpaid college debt.11
- Military student loan forgiveness – Military personnel in the Army, Navy, Air Force, National Guard, and Coast Guard may qualify for their own loan forgiveness programs.12 You can find more information on My Army Benefits. You may also be able to access legal guidance at your local Judge Advocate General’s (JAG) Corps office.
- State-sponsored repayment assistance programs – Licensed teachers, nurses, doctors, lawyers, and other professionals in certain states may be able to take advantage of programs to assist with student loan debt relief.
These are just some of the loan forgiveness programs available for student loans. Apply for any programs for which you qualify. Just make sure to steer clear of any potential student loan forgiveness scams.
Student loan forbearance or deferment
If you need more time to repay your loans after the federal pause ends, you’ll have to ask your lender to put your loans into either forbearance or deferment. Loan forbearance allows you to postpone monthly payments for specific periods. Depending on the forbearance program, interest on your loan may still accrue.
In contrast, loan deferment is a federal repayment program that allows you to pause or reduce student loan payments for up to three years. Depending on your loan type, you may or may not be responsible for interest charges that accrue on your loan.
You must apply with your loan servicer and meet eligibility requirements for both forbearance and deferment.
Student loan assistance from your employer
Some employers are beginning to offer employees help for student loan debt repayment. Employers do this by offering tax-free contributions to an employee’s student loans.
One provision of the CARES Act allows employers to pay up to $5,250 tax-free toward employees’ student loans until 2025.13 An employer could offer an employee a fixed monthly payment or contribution toward eligible education expenses outside the employee’s gross taxable wages.
Another way companies are helping with student loan debt is by implementing a matching program to employees’ retirement plans for every payment they make to their student loan debt. Ask your employer what programs and contributions they have in place to help relieve the burden of student loans.
Student loan refinancing
Refinancing your student loans could qualify you for a lower interest rate, saving you money in the long run. You can also refinance multiple loans, combining them into one loan to simplify repayment.
Before going down this path, know that refinancing federal loans converts them to private loans. As a result, you’ll lose access to federal loan protections like forgiveness programs and repayment plans.
How to pay off student loans
Student loan repayment may look different for everyone, depending on your goals and budget. As the student loan moratorium ends, sign into your student loan accounts and review your balances.
Explore your repayment plan options to determine which works best with your budget. Change your loans to an income-driven repayment plan if you’re pursuing PSLF, as those are the only repayment plans eligible for this program.
If you can afford it, consider making extra payments to get out of debt faster and save on interest. One strategy that might help is the debt avalanche method, where you first target loans with the highest interest rate. Another option is the debt snowball method, where you prioritize loans with the smallest balances.
How do you pay off student loans faster?
If you have extra budget, you can pay off student loans faster by making additional payments. Instruct your loan servicer to apply your extra payments to your principal balance rather than saving them for future bills.
What are your repayment options for student loans?
If you have federal student loans, you have several options for repayment, including the standard 10-year plan, extended repayment, graduated repayment, and income-driven repayment plans. Private student loans are not eligible for these federal plans, but your private lender may offer some flexibility. Contact your loan servicer to discuss your options if you need to adjust payments on your private student loans.
How do you apply for income-driven repayment?
You can apply for income-driven repayment by submitting an IDR Plan Request on the Federal Student Aid website. The process takes 10 minutes or less. You can select a specific plan or ask for whichever one would give you the lowest monthly payments.
The Department of Education recently introduced the option to disclose your IRS tax information. If you opt in, the Department will automatically recertify your income-driven repayment plan each year, so you don’t have to do it manually.