Campus Park, Pennsylvania —The payment suspension imposed due to the COVID-19 outbreak has ended, the Penn State Office of Student Aid is reminding students, parents, and alumni borrowers who are in repayment status and may still owing on a federal student loan. As a result, federal student loan interest started to accrue once more on September 1st, and payments will start up again in October.
March 2020 saw the suspension of federal student loan payments, interest, and collections due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Over the previous three years, the halt was repeatedly prolonged; but, on June 7, Congress passed a law prohibiting additional extensions of the payment pause.
Please be aware that current students who are enrolled at least half-time are not eligible for reimbursement. Most federal student loans have a six-month repayment period that starts when a student drops out of school or leaves college altogether.
The Federal Student Aid website has information on first-time student loan repayment that borrowers who have never made a payment on their loans are advised to check out.
At least 21 days before to the due date, borrowers should get a bill from their loan servicer, which is the organization in charge of managing their federal student loans. The bill will include the payment amount and date. It is advised that borrowers who have not received communication from their loan servicer or who are unsure of their loan servicer may visit the Federal Student Aid dashboard to identify their loan servicer.
The Office of Student Aid is advising borrowers to take the following extra actions as repayment gets underway:
Both your StudentAid.gov profile and the profile on the website of your loan servicer should have your contact information updated.
Check the status of your auto-debit enrollment or create a new one. You can accomplish this by visiting the website of your loan servicer or getting in touch with them directly. Sign in to find your loan servicer.
To determine whether to combine or discover a repayment plan that fits your needs and goals, use the Loan Simulator on StudentAid.gov.
Sign up for the latest SAVE Plan. With the goal of reducing student debt, the Savings on A Valuable Education (SAVE) Plan is an income-driven repayment (IDR) scheme. Instead of using the borrower’s loan total to determine payments, the SAVE plan takes into account their income and family size. After a predetermined amount of years, any outstanding liabilities are forgiven. Visit StudentAid.gov/SAVE to learn more about the advantages of the SAVE Plan and to enroll right now.
Additionally, the U.S. Department of Education established a temporary on-ramp period through September 30, 2024, to assist borrowers in effectively returning to repayment. Borrowers are shielded from having a delinquent recorded to credit reporting agencies during this on-ramp phase. By doing this, the severe effects of incomplete, delayed, or missed payments are avoided. Nevertheless, interest will continue to accumulate and payments are still required.
Visit StudentAid.gov for more details on the on-ramp phase and tools to assist borrowers in getting ready for the resume of student loan payments.