Student loan repayment plans reopening, Education                                   Department says. What to know



                               Repayment Restart:

Federal student loan payments, which were paused due to the pandemic, are resuming in January 2024. Borrowers will need to start making payments again, and interest will begin accruing after December 31, 2023.

Updated Repayment Plans: 

There are several options available to borrowers, including Income-Driven Repayment (IDR) plans, which tie monthly payments to income. These plans can offer more affordable monthly payments and may extend the repayment term.

Interest Capitalization:

 With the restart of payments, interest will begin accumulating again. Borrowers may see the principal balance grow if interest is not paid off during the first few months.

Borrower Protections: 

The Education Department has emphasized that borrowers in financial distress can apply for deferment, forbearance, or explore income-driven repayment plans to minimize their monthly payments. Additionally, some may qualify for forgiveness programs under the Public Service Loan Forgiveness (PSLF) program.

Communications from Loan Servicers: 

The Department is encouraging borrowers to update their contact information with their loan servicers and check for any correspondence, as they will receive detailed information about their specific repayment plans.

What to Do Now: 

It’s important for borrowers to review their options, check their loan servicer’s website, and consider adjusting their repayment plan based on their financial situation. Many borrowers will need to act before the January 2024 deadline to ensure they are prepared for resuming payments.