Navigating Resumption of Federal Student Loan Payments After Three-Year Pause

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As the world slowly emerges from the pandemic’s grip, a financial beast is rearing its head for millions of Americans: federal student loan payments. Following a pause of more than three years, a period that allowed borrowers to re-adjust their budgets and momentarily breathe a sigh of relief, the reality of student loan repayments is about to hit home. Interest on these loans is due to start accruing this Friday, and repayments will officially resume in October.

In a country where student loan debt stood at a staggering $1.77 trillion at the end of March, with 92% of this tied to federal student loans, the implications are far-reaching. Despite numerous postponements, the restart is part of a debt ceiling bill approved by Congress in June to avoid default. The nearly 44 million Americans with outstanding federal student debt need to brace themselves for the impending financial obligation.

Federal Student Loan Payments to Resume: What You Need to Know

The Resumption of Student Loan Payments

After a three-year pause due to the pandemic, federal student loan repayments are set to resume in October and the interest on these loans will begin accruing from Friday. This is a significant change for millions of individuals who have been able to exclude student loan payments from their budgets during this period. Despite several postponements, the restart was approved as part of a debt ceiling bill by Congress in June to avoid default. As of the end of March, student loan debt totaled more than $1.77 trillion, with 92% of that amount tied to federal student loans.

Loan Servicing and Repayment

Approximately 44% of borrowers have experienced a change in their loan servicers since the March 2020 pause. These changes have been communicated through emails, and recent graduates or attendees who are new to loan repayments are particularly encouraged to be vigilant about these changes. Borrowers are advised to confirm their servicer at and are expected to be notified of their monthly amount due 30 days before the due date with bills appearing in mailboxes from mid-September through early October.

Opportunities for Lowering Payments

The Biden administration is committed to easing the burden of student loans and has already erased $116 billion in student loans for 3.4 million borrowers. The introduction of the Saving on A Valuable Education (SAVE) program, expected to take effect in July, is designed to cut monthly payments and cap interest build-up, particularly benefiting low- and middle-income borrowers. The repayment under this program could be as low as 5% of a borrower’s discretionary income or even zero for those with no discretionary income.

Qualification for Loan Forgiveness

Aside from loan forgiveness for borrowers who have made at least 20 years of payments, other opportunities exist for those pursuing careers in public service. Specifically, the federal Public Service Loan Forgiveness Program offers loan forgiveness for qualified borrowers who make 10 years of consecutive payments while working full-time in government or not-for-profit roles.

Other Important Dates and Information

Borrowers with non-Department of Education debts are advised to consolidate them into a new Direct Consolidation Loan by Dec. 31. Those on income-driven repayment plans before the pause will have until around March to recertify their income. Moreover, benefits offered through the federal SAVE program begin in July, with undergraduate loans cut in half and borrowers with both undergraduate and graduate loans paying a weighted average between 5% and 10% of their income based on their original principal balances.


The resumption of federal student loan payments signifies a return to pre-pandemic normalcy. However, with the introduction of programs like SAVE and the continuation of loan forgiveness schemes, the burden of these repayments could be significantly eased for many borrowers. It’s crucial for borrowers to stay informed and proactive in managing their loans to take advantage of these relief options.

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