When Do Student Loan Payments Resume?

Federal student loan borrowers haven't had to make payments in over three years. But the longstanding payment freeze is ending. Student loans began accruing interest again on Sept. 1, and borrowers will need to start making payments in October.

Although the federal forbearance was extended several times in the past, there’s no chance of another student loan pause extension due to a provision in the debt ceiling deal passed by Congress on June 2, so you'll need to prepare for repayment.

On June 30, 2023, the Supreme Court blocked President Joe Biden's student debt cancellation plan, saying his administration lacked authorization under the HEROES Act to forgive up to $20,000 in student debt per borrower. Biden said he'd pursue other forgiveness options, but payments will become due in the meantime.

After the Supreme Court issued its ruling, the Biden administration announced a 12-month "on-ramp transition period" for borrowers after payments resume. During that period, borrowers will have time to adapt to the new payments without the risk of their loans being sent to collections or entering default.

"During this period, if you can pay your monthly bills, you should," Biden said in a press conference. "But if you cannot, if you miss payments, this on-ramp temporarily removes the threat of default or having your credit harmed, which can hurt borrowers for years to come."

The interest-free payment pause, known as forbearance, began as an emergency pandemic measure in response to the COVID-19 pandemic in March 2020 under President Trump. Three years and nine extensions later, renewed student loan bills could come as a shock to some of the nearly 44 million borrowers with federal loans. And borrowers who left school in 2020 or later will need to gear up for their first-ever student loan payments.

Here’s more detail on when student loan payments will resume, plus steps you can take today to get ready.

» GET READY: Download NerdWallet’s student loan repayment checklist

When are federal student loans due?

Federal student loans started accruing interest on Sept. 1. Unless you graduated recently and are currently in your loan grace period, you will have to start making payments in October. Your monthly payment amount and due date is dependent on your loan terms, but you can find that information on your monthly bill or by contacting your loan servicer.

» MORE: What's next for student loan borrowers after the Supreme Court's decision

Note that the expiration date is no longer tied to when the Supreme Court rules on Biden’s student debt cancellation plan. Previously, forbearance was scheduled to end either 60 days after June 30, or 60 days after a Supreme Court decision — whichever was sooner.

The payment pause had most recently been extended on Nov. 22, 2022.

» MORE: 11 jobs that will pay for college

What about Congress voting to roll back forbearance?

On July 7, President Biden vetoed a measure that would have retroactively ended the federal loan interest freeze. The legislation, part of the Congressional Review Act, challenged President Biden's forgiveness plan, but it also had other implications.

It would have also retroactively charged interest on existing loans, and it would have reversed loan forgiveness for some public servants, including teachers, nurses and public service workers.

SoFi drops lawsuit to end forbearance early

On June 5, private student loan company SoFi dropped a lawsuit it filed against the Department of Education to end forbearance, "in light of" the debt ceiling bill which codified the payment pause end date. In its original lawsuit from March, SoFi claimed the latest forbearance extension was "unlawful on multiple grounds" and has cost the bank millions in profits due to borrowers not refinancing during the payment pause.

What did the payment pause do?

During forbearance, first ordered by then-President Donald Trump in March 2020 as the COVID-19 pandemic took hold, federal student loan borrowers were allowed to skip payments. Loans that were on autopay were stopped, and collection activities on defaulted loans were also paused. The interest rate on federal loans owned by the Department of Education were set at 0%.

When repayment begins in October, your previous loan balance will be listed, minus any loan cancellation you may have qualified for under surviving loan forgiveness or cancellation measures. Borrowers that are working toward loan forgiveness have some good news; all of the payments that you missed during the payment freeze count as qualifying payments toward loan forgiveness.

» MORE: Even with payments paused, student loan borrowers struggle

Start planning for repayment now

With repayment just around the corner, start thinking about how you'll handle those payments and come up with a plan. Here are some steps you should take now to prepare for repayment:

• Locate your student loan servicer. The company that manages your student loans may have changed since forbearance began. Find your servicer by logging into StudentAid.gov. 

• Contact your servicer. Log in to your servicer’s website or give them a call. Update your contact information. Ask how much you might owe when payments resume, how much your monthly bills could be and what payment plans are available to you. Sign up for automatic payments; by doing so, you could qualify for a 0.25 percentage point interest rate discount 

• Consider an income-driven repayment plan. Your servicer can help you sign up for an IDR plan, or you can apply online. These plans lower your monthly bills to a set portion of your discretionary income. Your payment could be as low as $0 per month, and it's a good idea to apply early so that your payments reflect the lower amount when repayment begins. 

On June 30, Biden announced the launch of a new IDR plan. The new plan — SAVE — replaces the current Revised Pay As You Earn (REPAYE) plan, and eligible borrowers could save a significant amount of money by signing up for SAVE. You can use the federal loan payment simulator to find out which plan would give you the lowest payment and apply for SAVE online.

If your loans were in default before forbearance began, enroll in the temporary Fresh Start program to get them back into good standing.

Regardless of how you handle the remainder of forbearance, start preparing for repayment today.