The COVID-19 Payment Pause ended on September 1, 2023. Interest is now being added to federal student loans and the first bills will be due in October 2023. Although repayment has resumed, the Department of Education announced an “on-ramp” period to help borrowers who are still struggling during the first year of repayment. From October 1, 2023 through September 30, 2024, borrowers with loans that were covered by the payment pause who miss payments during the on-ramp period will not be considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies. Visit our Returning to Repayment page for more information.
Unfortunately, there may be times when you can’t afford to make payments on your student loans. You may be temporarily unemployed or unable to deal with your student loan payments for other reasons, such as active duty military service. The good news is that you can suspend your payments, at least for a while, in limited circumstances.
Your loan payments don’t typically start right after you graduate from college. There is usually an automatic grace period to help you get on your feet before your student loan payments begin.
If you are in repayment and need to pause your student loan payments, you may be eligible for a temporary deferment or forbearance. However, before you talk to your loan servicer about pausing your student loan payments, find out if you qualify for an income-driven repayment (IDR) plan. Your payment under an IDR plan could be as little as $0 per month. It is better to be on a $0 IDR payment than to pause your student loan payments through a deferment or forbearance because even with a $0 payment, you will earn credit towards IDR loan forgiveness. But if your payments under the IDR plan are still not affordable, then it may be worth considering a deferment or forbearance.
In many cases, your interest will continue to accrue even while your payments are paused and will be added to your principal when you begin repaying again. Interest adds up quickly and is often why loan balances grow so high and become unaffordable. You should consider all of the potential consequences before you ask for a deferment or forbearance.