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When does student loan repayment begin again after the pause?

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The federal student loan payment pause that began in March 2020 is ending in 2023. After more than three years without having to make payments, you may have gotten used to putting your paychecks toward other expenses and goals.

Since you last made federal student loan payments, other factors may have changed too—your loans may have moved to a different servicer or you may have new payment assistance options.

Here's what to know about federal student loan program changes, how to prepare to make payments again, and what to do if you can't afford your payments.

When does student loan repayment begin?

The emergency forbearance that paused loan payments during the pandemic officially ends on Aug. 31, 2023. Student loan interest starts accruing again on Sept. 1, and student loan servicers expect borrowers to restart monthly payments sometime in October 2023. Your loan servicer will provide you with the exact date your payment is due.

While the government previously extended the student loan payment pause several times, the debt ceiling deal Congress passed in June 2023 prevents further extensions.

What to do before you start making payments again

Ahead of your payment due date, it's a good idea to run through a few tasks. These will remind you where you left off, show you what programs you might be eligible for now, and make sure you know where to send your money.

Double-check who holds your loans

Your student loan servicer—the company you send your monthly payment to—may not be the same company in September 2023 that it was in March 2020. If your account was transferred, you should have received letters or emails from the Department of Education as well as from your old and new servicers.

If you aren't sure, you can check your account online at the Federal Student Aid website.

Validate your information & loan details

Connect with your servicer to confirm your contact information. Also review your loan balance, interest rate and number of credits toward forgiveness to verify these are all the same as before you paused your payments.

If you spot a discrepancy in any of your loan details, gather the documentation and ask your servicer about it. The Federal Student Aid website recommends filing a complaint if you're unable to reach a resolution.

Reassess your budget to account for loans again

Since the pandemic began, you might have experienced life changes that increased your expenses, such as buying a home, having a child, becoming disabled or getting divorced. Even if you haven't, you've probably gotten used to skipping your student loan payments and having that money available for other expenses.

Examine your recent spending and saving. What could you change so that student loan payments fit into your current budget? If you can't make the numbers work, you may want to consider different repayment plans, deferment, forbearance or forgiveness.

Reenroll in autopay

Loan servicers suspended borrowers' automatic payments with the emergency payment pause, and you may need to reenroll. Autopay helps you avoid missing payments, and you can receive a 0.25% interest rate deduction if you have Direct Loans.

Check for employer assistance

Employers are increasingly offering to help employees pay off their student loans, sometimes with pretax dollars. And starting in 2024, fewer borrowers may have to decide between paying off student debt and saving for retirement.

That's because the SECURE Act 2.0 allows employers to make matching contributions to an employee's workplace retirement plan based on that employee's student loan payments. So, if you haven't been saving for retirement due to student loan obligations, you may not have to sacrifice this important employee benefit—if your employer opts in.

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What to do if you can't afford your student loan payment

Your financial and life circumstances may have changed since the student loan pause. If resuming your payments as they were doesn't seem feasible, you may have some options to consider.

Explore other payment plans

The Standard Repayment Plan is configured on a 10-year schedule, but you may be able to apply for alternative payment plans. The Graduated Repayment Plan allows you to start with a lower payment that increases over time. With an Extended Repayment Plan, your payment schedule can stretch up to 25 years. Finally, income-driven repayment plans base your payment on your discretionary income. Federal Student Aid's Loan Simulator can help you explore these options.

Ask about the one-time IDR account adjustment

Under a new one-time payment count adjustment policy, the Department of Education is reviewing borrowers' accounts to apply for loan forgiveness. Even if you haven't enrolled in an income-driven repayment plan, you may have your remaining balance forgiven or receive credit toward eventual forgiveness.

Seek a deferment or forbearance

Both of these options let you temporarily stop making payments without defaulting on your loans. But they have some key differences.

If you're eligible for deferment due to a particular continuing education or hardship need, you can pause your payments for up to three years, and interest on certain loans stops accruing. Forbearance allows you to pause your payments for up to a year in certain financial and service circumstances, but loan interest may still accrue and capitalize.

Look into consolidation or refinancing

These are two main avenues for combining multiple student loans that can potentially help you get more favorable terms.

Consolidation involves merging only your federal student loans and keeps you in the Federal Student Aid system. It can make repayment easier by giving you one monthly bill. Your payment amount could also go down, though it may extend your repayment period. Your overall interest rate doesn't usually change.

Refinancing unites multiple loans—whether federal or private—into a single new loan with a private lender. You may be able to snag a competitive interest rate or lower payments. But keep in mind that loans with a private lender aren't eligible for federal loan benefits, such as repayment plans or forgiveness.

Apply for loan forgiveness

Although recent efforts to expand student loan relief haven't been successful, you may still be eligible to have your federal loans forgiven through certain programs. If you have a career in government, nonprofit services, medicine or education, you can seek Public Service Loan Forgiveness (PSLF). With this program, you may be able to eliminate your Direct Loan after you make a number of qualifying payments during full-time employment.

Certain educators may be eligible for Teacher Loan Forgiveness of up to $17,500, but note that forgiveness credits can't apply to both this and PSLF for the same period of full-time employment.

What to do if you defaulted before the student loan pause

If you defaulted before the payment pause, you may be eligible for the Fresh Start program. This one-time program takes loans out of default and puts them into repayment status.

Contact your loan holder to get started. Once enrolled, you'll have a new repayment plan under the Federal Student Aid system and access to the system's benefits. Fresh Start also removes the default from your credit report.

What to know about collection refunds & credit issues

The student loan pause and payment restart haven't been and won't be without bumps. Two key things all borrowers should be aware of are 1) refunds of collections and nonrequired payments and 2) a 12-month pause on credit reporting:

  • Credit reporting. If you miss payments during the 12 months following the payment restart, student loan servicers aren't supposed to report your account as delinquent to credit agencies. Given the complexities of the student loan system, you may want to verify this with your servicer and keep an eye on your credit reports.

Moving forward with your student loan repayment plan

With these tips and to-do lists, you can be prepared when student loan payments resume. The sooner you iron out any mistakes, consolidate your loans or change your repayment plan, the better. If you're considering refinancing your student loans, Thrivent Credit Union has options to explore and experts on hand to help you make informed decisions.