UNIVERSITY PARK, Pa. — The Penn State Office of Student Aid is reminding student, parent and alumni borrowers who are in repayment status and may still owe on a federal student loan that the payment pause enacted due to the COVID-19 pandemic has ended. As a result, interest on federal student loans began to accrue again on Sept. 1 and payments will resume in October.
Federal student loan payments, interest and collections were suspended in March 2020 as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The pause was extended multiple times over the last three years, but Congress passed a law on June 7 preventing further extensions of the payment pause.
Please note that repayment does not apply to current students who are enrolled at least half time. Repayment on most federal student loans begins six months after a student leaves college or drops below half-time enrollment.
Those borrowers who have never made a student loan payment are encouraged to visit the Federal Student Aid website, which includes information on repaying student loans for the first time.
Borrowers should be hearing from their loan servicer — the company that manages their federal student loan — and receive their bill, which will include the payment amount and due date, at least 21 days before payment is due. Anyone who has not heard from their loan servicer, or is unsure who services their loan, is encouraged to log in to the Federal Student Aid dashboard to find their loan servicer.
Below are additional steps that the Office of Student Aid is encouraging borrowers to take as repayment begins:
- Update your contact information in your profile on your loan servicer’s website and in your StudentAid.gov profile.
- Review your auto-debit enrollment or sign up for the first time. To do so, log in to your loan servicer’s website or contact your loan servicer directly. Find your loan servicer by logging in here.
- Check out the Loan Simulator on StudentAid.gov to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
- Apply for the new SAVE Plan. The Saving on A Valuable Education (SAVE) Plan is an income-driven repayment (IDR) plan that is intended to lower student debt. The SAVE plan calculates payments based on a borrower’s income and family size, instead of their loan balance, and forgives remaining balances after a certain number of years. Borrowers can learn more about the SAVE Plan’s benefits and sign up today by visiting StudentAid.gov/SAVE.
To help borrowers successfully return to repayment, the U.S. Department of Education also created a temporary on-ramp period through Sept. 30, 2024. This on-ramp period protects borrowers from having a delinquency reported to credit reporting agencies. This prevents the worst consequences of missed, late or partial payments. However, payments are still due, and interest will continue to accrue during this time.
More information about the on-ramp period, as well as resources to help borrowers prepare for student loan payments to resume, can be found at StudentAid.gov.