Student Loan Pause is Ending
College FundingFederal student loan payments have been paused since March 2020, when the CARES Act was signed into law, and the suspension has been extended many times since then. Federal student loan payments will again be due later this year, and interest will start accruing again after being fixed at 0% since March 2020.
When Will Loan Repayments Start to Resume?
Most federal student loan interest rates have been set to 0% since March 13, 2020. While student loan payments have been paused for more than three years, you still owe the remaining balance. Interest will start accruing on September 1, and loan repayments will begin in October. The big question you may want to ask yourself is: “How much can I afford to put toward my student loans each month?”
What is the “On-Ramp” for Student Loans?
The Biden administration announced a 12-month “on-ramp” period that is intended to give borrowers some breathing room as they figure out how to afford the monthly payments on their student loans. This period will begin October 1, 2023 and end on September 30, 2024.Borrowers who miss or are late in their payments won’t be reported to the credit reporting agencies, nor will they be considered in default. Also, their loans won’t be sent to collection agencies.
What is the SAVE Plan?
You can sign up for a new income-driven repayment program called the SAVE plan. According to a June 2023 White House press release, the SAVE plan may cut a borrower’s required monthly payments in half, and more people than ever may qualify for a $0 monthly payment on their federal student loans, while other borrowers will save at least $1,000 per year.
WAEPA’s Free Financial Wellness Program
WAEPA members have access to an EY financial planner who can help review your budget, address student loan debt, and make progress step-by-step.
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