As part of the debt ceiling bill signed by President Biden on June 3, 2023, Congress ordered the end of the payment pause that began with the CARES Act in March 2020. Accordingly, interest accrual on federal student loans began September 1, 2023 and payments restarted on October 1, 2023.
While NEA members will continue to advocate for broad student debt loan relief and cancellation, we want to make sure you have the resources you need to adjust to the resumption of payments now.
What to Expect Now That Payments Have Resumed
Getting Your Payments Restarted
Our experts are here to help you navigate the complicated student loan debt system. Follow these five steps to ensure the shift to repayment goes as smoothly as possible.
1. Identify Your Servicer
Many borrowers were transferred to a new loan servicer during the payment pause. For example, if you applied for Public Service Loan Forgiveness, your loans have been or will be transferred to MOHELA. Make sure you’ve set up your online account with your new servicer.
If you are not sure which servicer your loans were transferred to, log into your Federal Student Aid dashboard. If you can’t log in, call 1-800-4-FED-AID (1-800-433-3243) for loan servicer information.
2. Update Your Contact Information
Your servicer will need current contact information to notify you about upcoming payments. Make sure your servicer has the correct email address, telephone number, and mailing address. If you do not know who your servicer is, log into your studentaid.gov account with your FSA ID.
The Department of Education will need current contact information to notify you about the resumption of payment. Update your contact information on your studentaid.gov account today!
3. Enroll in or Recertify Your Income Driven Repayment (IDR) Plan
Income-driven repayment (IDR) plans can often provide a lower monthly payment because they are based on your income and family size. If either one of those changes, you have options, including having your IDR plan recalculated or switching to a new IDR plan.
The Biden Administration has announced the creation of the newest and best income-driven repayment plan—SAVE. If you are already enrolled in the REPAYE Plan or sign up for the REPAYE plan now, you will automatically be transferred to the SAVE plan. Under SAVE, your monthly payments will drop by at least $1,000 annually and any unpaid interest will be erased monthly!
- If you have parent PLUS loans, you must consolidate your loans to become eligible for an IDR plan.
- If you are already enrolled in an IDR plan, your servicer will let you know if it is time for your annual recertification. If your income and/or family size has changed, your required monthly payment amount may increase or decrease.
- If you cannot afford your payment amount under your current IDR plan, explore other IDR plans and submit an application for the one that best fits your needs. NEA members can receive free personalized advice about IDR plans from student debt experts using our Student Debt Navigator.
- If you are not enrolled in an IDR plan, explore the IDR plans and submit an application for the one that best fits your needs.
Remember: NEA members can receive free personalized advice about IDR plans from student debt experts using our Student Debt Navigator
4. Enroll In Autopay
Don’t miss a single payment, enroll in autopay with your servicer. If you enroll in autopay, you will save 0.25% on your interest rate. You will receive a reminder before every payment is made.
If you were enrolled in autopay before the payment pause, you may need to reenroll.
5. Get Help if Your Loans Are in Default
Getting your loans in good standing and making payments now can get you on the path towards Public Service Loan Forgiveness (PSLF) and other forgiveness programs. The Biden Administration has developed a life-changing program that will bring borrowers out of default and give them access to PSLF, called Fresh Start.
Note: Do Not Ignore Messages From Your Servicer
Payment will be due soon after you receive an invoice. To ensure you make your payments on time, open and read every message you receive from your servicer.
Missed payments can quickly become a problem. Missed payments do not count towards PSLF, unless you repay the amount due within 15 days of the due date. If you miss your payment due date, your loan will become delinquent until you repay the amount due. Your servicer is likely to report delinquency to the credit bureaus after 90 days, and your loan can risk going into default if it remains delinquent.
However, if you miss a payment or cannot make a payment— not to worry, the Department of Education has promised that for the next year any missed, partial, or late payments will not result in default or loans being sent to collection agencies. In addition, missed payments will not be reported to credit reporting agencies.
Have further questions? Watch our expert webinar on payment resumption:
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