The U.S. Department of Education's COVID-19 relief for student loans has ended. The 0% interest rate ended Sept. 1, 2023, and payments restarted in October.
Federal student loan payments were paused for more than 3 years due to COVID-19. Payments resumed in October 2023. This Q&A report looks at how the Department of Education communicated with borrowers about resuming their payments.
The student loan payments pause included a pause of collections on defaulted loans. Collection efforts, including collection calls and wage garnishment, will resume one year after the payment pause ends—no later than September 2024.
The Supreme Court ruled we could not implement pandemic-related student loan debt relief, so we can't use your application from 2022. The new proposed regulations are different, and we're currently working to finalize their terms, including who may receive loan forgiveness.
For federal student loans, this information can be found on your Dashboard when you log in to your studentaid.gov account. For private student loans, you will likely need to review your account online with your loan servicer or contact your lender directly.
Generally, if you miss payments, your loan is considered delinquent and is reported as such to the national credit reporting agencies. You don't get reported when you're in forbearance. During the on-ramp period (through Sept. 30, 2024), we automatically put your loan in a forbearance for the payments you missed.
Since federal student loan payments resumed in October 2023 after a 3½ year pause due to the COVID-19 pandemic, about half of borrowers in repayment (17.8 million) were current on their loan payments as of January 31, 2024.
Collection activities are currently paused for all federal student loans through September 2024, which should protect your 2022 and 2023 federal and state tax refunds. But you may need to take action.
You will receive notification of your loan discharge via email, mail and/or your online loan servicing account (depending how your communication preferences are set). It will also be reflected when you log in to the Federal Student Aid site using your FSA ID.
Your wages may be garnished. This means your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan. You can no longer receive deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.
The COVID-19 Payment Pause ended on September 1, 2023. Interest is now being added to federal student loans and the first bills will be due in October 2023.
Each time you satisfy a bill due, we will automatically advance your next payment due date and your billing statement will indicate a payment is not required for that bill.
The COVID-19 payment pause on federal student loans officially ended last year, with most borrowers having their first payment due in October 2023.
Sixteen percent of Americans with student loans are behind on their payments, putting them at risk of accumulating interest and lowering their credit scores. Those with lower incomes and less education are more likely to be behind on their payments. Source: Federal Reserve (2024). Source: Federal Reserve (2024).
While student loans tend to have lower interest rates than other common forms of debt, such as credit cards, you can save money on interest by paying off your loans sooner. If student loan debt is the only type of debt you have or the highest-interest debt you have, it may make sense to pay your loans off early.
Any borrower with ED-held loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if the loans are not currently on an IDR plan. Borrowers with FFELP loans held by commercial lenders or Perkins loans not held by ED can benefit if they consolidate into Direct Loans.
In July 2024, AFT sued MOHELA for a wide range of unlawful practices, including illegally executing a “call deflection” scheme to deny service to borrowers who need help.
Grace Periods. One of the most common reasons you might have a $0 monthly student loan payment right now is because you're in something called your grace period. This is generally the six-month period after you leave college when no loan payments are required. It can take a minute to get used to life after college.
Let's say you have $200,000 in student loans at 6% interest on a 10-year repayment term. Your monthly payments would be $2,220. If you can manage an additional $200 a month, you could save a total of $7,796 while trimming a year off your repayment plan.
For example, the interest on a $30,000, 36-month loan at 6% is $2,856. The same loan ($30,000 at 6%) paid back over 72 months would cost $5,797 in interest. Even small changes in your rate can impact how much total interest amount you pay overall.
A federal court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans. Note: Eligible borrowers may now enroll in PAYE and ICR Plans. We will continue to update StudentAid.gov/saveaction with more information.