The payment pause ended in September 2023
Student loan payments restarted on September 1, 2023, after a pause that lasted roughly three years. The pause began in March 2020 under President Trump as a response to the COVID-19 pandemic. President Biden extended it multiple times after taking office in January 2021. When the pause ended in September 2023, borrowers had to resume making monthly payments on federal student loans.
During the pause, interest did not accrue on most federal student loans, and the government did not pursue collections on defaulted loans. Borrowers were not required to make payments, though they could choose to pay if they wanted to. This pause affected Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans held by the Department of Education.
Key Takeaways
- The payment pause started under Trump in March 2020 and lasted until September 2023, when payments restarted under Biden.
- During the pause, interest did not accrue and no payments were required, though borrowers could pay voluntarily.
- The pause affected federal student loans but not private loans.
- Borrowers who were in default before the pause had collections activity resume when payments restarted.
What the pause actually covered
The pause applied only to federal student loans held by the Department of Education. This included Direct Loans (the most common type), FFEL loans, and Perkins Loans. Private student loans were never part of the pause, so borrowers with private loans had to keep paying throughout.
Parent PLUS loans were covered by the pause. Loans held by the Department of Veterans Affairs or other agencies were not covered. If you had federal loans with a private loan servicer or held by a private lender, you needed to check your loan documents to know whether the pause applied to you.
What happened when payments restarted
On September 1, 2023, borrowers had to resume making monthly payments on federal student loans. Interest began accruing again on loans where it had stopped during the pause. Borrowers who had been in default before March 2020 saw collection activity resume, including wage garnishment and tax offset if they had not made arrangements with their loan servicer.
The Department of Education sent notices to borrowers before the restart date. Borrowers could contact their loan servicer to set up a payment plan or discuss options if they were having trouble paying. Income-driven repayment plans remained available for borrowers who wanted to lower their monthly payment based on their income.
Loan forgiveness programs that existed during and after the pause
During the pause, the Public Service Loan Forgiveness (PSLF) program continued to accept applications. Borrowers working in government or nonprofit jobs could count the months of the pause toward the 120 payments required for forgiveness. The PSLF Limited Waiver, which ran from October 2021 to October 2022, allowed borrowers to count past periods of forbearance and deferment toward the 120-payment requirement.
President Biden announced a separate loan forgiveness plan in August 2022 that would have forgiven up to $20,000 for Pell Grant recipients and up to $10,000 for other borrowers. This plan faced legal challenges and did not go into effect. Borrowers should check the Department of Education website to see what forgiveness programs currently exist and whether they meet the requirements.
Income-driven repayment plans and the SAVE plan
Income-driven repayment plans allow borrowers to pay based on their income rather than the standard 10-year plan. The Department of Education offers four income-driven plans: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). Payments under these plans can be as low as $0 per month if your income is below the poverty line.
In 2023, the Department of Education introduced the SAVE plan (Saving on a Valuable Education), which is a newer income-driven plan. The SAVE plan calculates payments based on a smaller portion of discretionary income than other plans and offers faster forgiveness for borrowers with smaller loan balances. Borrowers can switch to any of these plans at any time by contacting their loan servicer or using the Federal Student Aid website.
What to do if you fell behind during the pause
If you did not make payments during the pause and your loans went into default before the pause ended, collection activity resumed in September 2023. This can include wage garnishment, tax offset, and calls from collection agencies. If this happened to you, contact your loan servicer immediately to discuss options.
You can request a rehabilitation plan, which typically requires nine on-time payments over ten months to remove the default from your credit report. You can also consolidate your defaulted loans into a Direct Consolidation Loan, which stops collection activity and gives you a fresh start with a new repayment plan. Both options have specific rules and timelines, so ask your servicer which option fits your situation.
Frequently Asked Questions
Can I still get my loans forgiven after the pause ended?
Forgiveness programs that existed before the pause ended are still available. Public Service Loan Forgiveness continues to accept applications for borrowers in government or nonprofit jobs. Other forgiveness programs depend on what the Department of Education currently offers. Check the Federal Student Aid website or contact your loan servicer to see what you may be able to pursue.
What if I cannot afford to pay when payments restart?
Contact your loan servicer before your first payment is due. You can request an income-driven repayment plan, which can lower your monthly payment to $0 if your income is low enough. You can also request a deferment or forbearance, though interest will accrue on unsubsidized loans during these periods. Your servicer can walk you through each option.
Do I have to pay back the interest that did not accrue during the pause?
No. Interest that did not accrue during the pause was not added to your loan balance. When payments restarted, your balance was the same as it was when the pause began. Interest only started accruing again on September 1, 2023.
What if my loan servicer changed during the pause?
The Department of Education contracts with different companies to service loans. If your servicer changed, your loan balance and payment history moved with you to the new servicer. You should contact your current servicer to confirm your balance and set up a payment plan. You can find your current servicer on the Federal Student Aid website.