Navigating the Restart of Student Loan Payments
After a lengthy pause, federal student loan payments have officially restarted. Many borrowers are feeling anxious about the transition, especially those who have never made a payment before. Here’s what you need to know about the programs impacted, how the repayment system works, and practical steps you can take to prepare.
Who Is Affected?
The payment restart primarily affects borrowers with federal student loans held by the U.S. Department of Education. This includes:
Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans (for parents and graduate students)
Direct Consolidation Loans
Private student loans were not part of the federal pause and have continued regular payments. Some older Federal Family Education Loan (FFEL) and Perkins Loans not held by the Department of Education may not have resumed payments. Borrowers with these loans should confirm the status with their servicer.
What Happens Now?
Interest resumed in September 2023, and payments began in October 2023.
Your loan servicer (such as Nelnet, MOHELA, or Great Lakes) should have provided your payment amount and due date.
If you are unsure of your servicer or balance, log into studentaid.gov to verify your information.
Graphic: How to Check Your Loan Type and Servicer
Go to studentaid.gov.
Click “Log In” and use your FSA ID.
On your dashboard, review the “My Aid” section.
Check each loan’s type (Direct, FFEL, Perkins) and the servicer name.
Note if loans are held by the Department of Education or a private lender.
Repayment Plans and Options
The good news is that there are multiple repayment plans designed to make payments manageable:
1. Standard Repayment: Fixed payments over 10 years. Higher monthly cost but pays off loans faster.
2. Graduated Repayment: Payments start lower and increase every two years. Good for those expecting higher income over time.
3. Income-Driven Repayment (IDR) Plans: Payments based on your income and family size. The new SAVE plan (successor to REPAYE) offers lower monthly payments and additional interest subsidies. After 20-25 years, remaining balances may be forgiven (forgiveness may be taxable).
4. Public Service Loan Forgiveness (PSLF): Available to borrowers working in qualifying government or nonprofit roles. Forgives remaining balance after 120 qualifying payments.
How to verify your PSLF status: Log in to your servicer’s website (MOHELA currently handles PSLF) or studentaid.gov to view your qualifying payment count. Submit an Employment Certification Form (ECF) annually or whenever you change employers to keep your record up to date.
Step-by-step for PSLF ECF:
Download the form at studentaid.gov/pslf.
Complete the borrower information section.
Have your employer fill out their certification section.
Sign and date the form.
Submit through your servicer’s portal or mail.
Keep a copy for your records.
How to Prepare for Payments
Update Your Contact Information: Ensure your servicer and studentaid.gov have your current phone, email, and address.
Review Your Budget: Reassess monthly spending to make room for payments.
Choose the Right Plan: Use the Loan Simulator at studentaid.gov to compare payment options.
Set Up Auto-Debit: Many servicers offer a small interest rate discount for auto-pay.
Consider Consolidation or Refinancing: If you have multiple loans, consolidation may simplify payments. Private refinancing can lower rates but sacrifices federal protections.
If You Can’t Afford Payments: Apply for IDR or hardship deferment. Ignoring payments can lead to delinquency or default.
Key Takeaways
Federal student loan payments are active again—know your loan type and servicer.
Some older FFEL and Perkins loans not held by ED may have different rules.
IDR, SAVE, and PSLF programs can help keep payments manageable or lead to forgiveness.
Verifying PSLF status annually ensures your progress is tracked.
Planning ahead and using available tools can reduce stress and prevent missed payments.
