For the first time in over three years, federal student loans will begin accruing interest on Sept. 1.
The pandemic forbearance on payments and interest first instituted by former president Donald Trump in March 2020 officially expires after several extensions.
You have at least a month until you'll have to make that first payment in October, and you'll want to check in with your loan servicer as soon as possible to know your exact due date. If you're not sure who your loan servicer is, you can log in to the Federal Student Aid website to find out.
Here are a few other key facts to keep in mind as you head into repayment.
You have a delinquency grace period
If you miss your payment due date or can't make a payment at that time, there is some leeway.
Now through Sept. 30, 2024, missed or late payments will not trigger a delinquency or be reported to the credit agencies, so your credit score won't be dinged right away.
However, interest will still be growing, so it's a good idea to stay on top of your payments when you can.
You'll owe no interest as a low-income borrower on SAVE
For over a million borrowers, according to White House estimates, interest won't come back just yet if they enroll in the new Saving on a Valuable Education income-driven repayment plan.
That's because on the SAVE plan, you won't be charged for interest that exceeds your minimum monthly payment.
Individuals who earn $32,800 a year or less qualify for a $0 monthly payment, so any interest that accrues will not be charged. Similarly, if your monthly payment is $30, but $50 in interest accrues in a month, you won't be charged the additional $20.
Borrowers who don't qualify for a $0 monthly payment can still save around $1,000 a year on the SAVE plan, according to the Department of Education.
You have options if you can't pay back your loans
You don't have to stick with the standard repayment plan; there are several plans to choose from that could lower your monthly payment. But if you've explored those options and the payment is still too high for you to afford, you have a few additional resources as a federal student loan borrower.
If you are unemployed, returning to school, undergoing serious medical treatments or serving in the military, a deferment or forbearance may be the best way to keep your loans in good standing without having to make payments.
Depending on your situation and the type of loans you have, interest may keep accruing while your payments are paused, so it's best to leave these options as a last resort. You can also make interest-only payments to avoid having the interest added to your principal balance at the end of your deferment.
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