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Get Ready: Student Loan Payments Resume on October 1 – Here’s What You Need to Know

Millions of Americans with student loans will need to start making payments again from October 1.

The suspension of student loan payments began in March 2020 as part of a series of economic relief measures related to the pandemic. Although the suspension was extended multiple times, Congress recently blocked further extensions.

Some people had wondered if a potential government shutdown might lead to further delays, but officials from the Education Department stated that this would not be the case, as loan servicers would still be able to process payments. Additionally, Congress voted on Saturday to extend government funding, avoiding a shutdown for now. However, there could be another funding dispute in November.

“Even if extreme House Republicans needlessly shut down the government, loan payments will continue to be due starting this month,” said a spokesperson from the Education Department to CBS News.

Here are the key things you need to know:

When are student loan payments due?

Starting in October, payments will be due, according to federal officials. You should have received a billing statement or notice at least 21 days prior to the due date. If you haven’t received any notice, reach out to your student loan servicer, as advised by the Education Department.

While payments are due in October, interest has been accruing since September 1.

How do I find out who my loan servicer is?

During the pandemic, some loan servicers changed, so the entity that handled your loan before March 2020 (when the freeze on repayment began) may not be the one you are currently dealing with. You can find out which servicer is handling your loans by logging into your account on the Federal Student Aid website and clicking on “My Loan Servicers.” Experts recommend ensuring that you can access your account with the servicer.

I moved. Should I update my information?

CBS MoneyWatch reports that you should update your information with your loan servicer. Log into your servicer account or create a new account if you don’t have one to check your contact details. It’s been over three years since loan payments were last due, so your information may need to be updated.

How can I find out how much I owe?

According to the National Association of Student Financial Aid Administrators, logging into your servicer account will provide you with information on how much you owe and the due date of the payment.

What student loan repayment plans are available?

Borrowers are automatically enrolled in the standard repayment plan, which involves a 10-year schedule to pay off their balances. However, this plan can be expensive, and borrowers may be shocked at the amount due in October. Alternative repayment plans, such as the Saving on a Valuable Education (SAVE) plan introduced by the Biden administration, are available. The SAVE plan is an income-based repayment option that has the potential to lower or eliminate monthly loan payments for over 20 million borrowers. To apply for the SAVE plan, visit the Education Department’s website. You can use the loan simulator on the Federal Student Aid site to determine the best plan for you, including income-driven repayment plans that adjust payments based on monthly income.

What is the SAVE plan?

The SAVE plan is open to borrowers with direct subsidized and unsubsidized loans, Direct PLUS loans for graduate and professional students, and direct consolidation loans. While the plan is available for applicants, its full benefits will not be effective until 2024. For example, borrowers in the SAVE plan with undergraduate loans will see their monthly payments reduced from 10% to 5% of their discretionary income, but the 5% rate will begin in mid-2024 according to the Education Department.

The SAVE plan includes other immediate relief measures, such as eliminating negative amortization, which previously caused interest on student loans to accumulate, often leaving borrowers owing more than the original amount borrowed.

—With reporting by the Associated Press.

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