During this period, missed, late or partial payments won’t be reported to the credit agencies. The on-ramp period lasts through Septemand lessens the consequences of missing payments so borrowers can adjust to repayment. If you have outstanding federal student loans impacted by the payment freeze, you’re automatically eligible for the temporary on-ramp period. If your payment under SAVE doesn’t cover all of the accrued interest, the government waives the remaining amount each month. Important: With the new Savings on a Valuable Education (SAVE) plan, the government covers the excess interest. If you’re enrolled in an income-driven repayment (IDR) plan, your payment is solely based on your discretionary income. Now that the payment freeze is over, interest rates will return to their original levels and begin accruing again.Īccording to the Federal Student Aid Office, as interest accrues on your balance, your servicer may be required to increase your monthly payment to ensure your loans are paid off on time. What will happen to unpaid interest when payments restart?įor the past three years, interest didn’t accrue on existing federal student loans since interest rates were set at 0%. Not everyone has a due date on the first of the month your payment due date varies based on your loan terms and payment plan, so check with your loan servicer to find out when your first payment is due. On October 1, loan servicers reset accounts and payments became due. Interest began accruing on outstanding loans as of September 1, 2023. The end of the federal student loan pause occurred in stages. Related: Average Student Loan Debt Statistics Student Loan Repayment FAQs When will student loan payments resume? Since March 2020, federal student loan payments have been frozen no payments were due, and interest rates on outstanding loans were temporarily set at 0%.Īfter several extensions, the federal payment freeze ended on October 1, 2023, and borrowers must restart repaying their loans.
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