Navigating the impending resumption of student loan repayments is a critical endeavor, with just a few weeks left before the process kicks in.
Starting from September 1, accrued interest will once again start accumulating on outstanding balances, followed closely by the resumption of debt repayments in October.
While these dates stand as focal points, it’s essential to grasp the broader landscape, including the enrollment window for President Joe Biden‘s innovative payment plans and the deadline for opting into autopay.
Key dates you must consider
One crucial milestone is September 1, 2023, which marks a pivotal date in this timeline. On this day, the accrual of interest on federal student loans will resume. Although the technical count of 60 days after June 30, 2023, falls on August 29, 2023, the practical interpretation of this event aligns with the commencement of the following month.
As October 2023 arrives, it heralds the reinstatement of repayments. Borrowers will be afforded a window of at least 21 days to fulfill their student loan payment obligations. This grace period offers some breathing room as individuals adjust to the renewed financial commitment.
The period spanning from October 1, 2023, to September 30, 2024, known as the “on-ramp” phase, holds noteworthy implications. During these twelve months, late payments will not be reported to credit reporting agencies or forwarded to collection agencies. However, it’s important to note that interest will continue to accumulate over this period.
Will student loan forbearance be extended again?
Another significant development awaits borrowers on July 1, 2024. This marks the introduction of the innovative SAVE income-driven repayment plan.
The standout feature of this plan is the potential to reduce payments for undergraduate federal student loan debt by half.
While certain aspects of this plan will be phased in early, such as the elevation of the income threshold from 150 percent of the poverty line to 225 percent, other changes will be implemented over a more extended timeline.