• Student loan restart payment is the resumption of payments and interest accrual on federal student loans after a three-year pause due to the COVID-19 pandemic. The payment pause was extended multiple times by the Trump and Biden administrations, but it ended on May 11, 2023, and Congress did not pass any further extensions. https://oag.dc.gov/release/consumer-alert-payments-federal-student-loans-will.
• Student loan interest resumed on September 1, 2023, and borrowers will have to restart payments in October 2023. The U.S. Department of Education will notify borrowers before payments restart, and send them a bill at least 21 days before their due date. Borrowers can find their loan servicer, payment amount, and due date on their StudentAid.gov account. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart. https://fortune.com/recommends/loans/october-student-loan-payments-resume/. https://oag.dc.gov/release/consumer-alert-payments-federal-student-loans-will.
• Borrowers who refuse to pay their loans may face serious consequences, such as:
• Damaging their credit score and report, which can affect their ability to get loans, mortgages, credit cards, or even jobs in the future. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart.
• Losing eligibility for deferment, forbearance, forgiveness, or repayment plans that could lower their monthly payments or cancel their debt. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart.
• Facing collection actions from their loan servicer or the government, such as wage garnishment, tax refund offset, or lawsuit. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart.
• Accruing more interest and fees on their loan balance, which can increase their debt and make it harder to pay off. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart.
• Borrowers who are struggling to pay their loans have several options to avoid defaulting on their loans, such as:
• Applying for an income-driven repayment (IDR) plan, which adjusts their monthly payment based on their income and family size. There is a new IDR plan called the Saving on a Valuable Education (SAVE) Plan, which offers the lowest monthly payments of any IDR plan for most borrowers. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart. https://fortune.com/recommends/loans/october-student-loan-payments-resume/.
• Requesting a deferment or forbearance, which temporarily pauses or reduces their payments due to economic hardship, unemployment, illness, disability, or other reasons. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart.
• Enrolling in auto pay, which automatically deducts their payment from their bank account each month and gives them a 0.25% interest rate reduction. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart. https://fortune.com/recommends/loans/october-student-loan-payments-resume/.
• Contacting their loan servicer to discuss other options or get assistance with their repayment plan. https://studentaid.gov/manage-loans/repayment/prepare-payments-restart. https://fortune.com/recommends/loans/october-student-loan-payments-resume/.
Therefore, student loan restart payment is a major change for millions of federal student loan borrowers who have not made payments since 2020. Borrowers should be aware of the risks of refusing to pay their loans and the options available to make their payments more affordable. Borrowers should also update their contact information and check their StudentAid.gov account for more details about their loans.
Please be careful when not replaying your loan. It can follow you for many years in a bad way.
Pres1 Research Team
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