Student Loan Payments Set to Resume September 2023: Seven Tips from Our Experts

June 5, 2023

The pause on federal student loan payments and interest is coming to an end in August 2023, more than three years after implementation. New legislation around the debt ceiling specifies that the current pause cannot be extended by an executive action.

Interest will start accruing on federal loans in September, and the first payments will be due in September and October – borrowers will receive specific billing details over the coming months. In June 2023, President Biden announced that there would be an "on ramp" period when payments resume: even though interest will accrue and payments will be due, borrowers will not be reported as delinquent if they miss payments within the first 12 months. However, the Department of Education has clarified that they do not control how missed or late payments are reported by credit agencies, so making payments is still advisable during this time period.

Here are a few concrete checks and actions that borrowers can start taking now to ensure they’re ready to start making payments again.

1. Make sure you know your loan servicer.

  • The federal government contracts private companies called loan servicers to oversee your loans – those are companies like MOHELA, Aidvantage, and Nelnet who send you statements and whose websites you use to make payments. But you might have a different loan servicer now than when you did back in February 2020 – many of their contracts have ended (for example, FedLoan and Great Lakes) and your loans may have moved somewhere new.
  • If you’re not sure who your servicer currently is, you can look it up at Federal Student Aid. On the Dashboard page, you’ll see a section called “My Servicers” with a link to their websites. If your servicer has changed, make sure you have an online login set up at the new servicer.

2. Make sure your contact information is up to date.

  • Even if your servicer hasn’t changed, make sure they have your updated phone number, email address, and address if it’s changed over the past few years. That way you can be sure to receive important account updates.

3. Make sure your monthly payment is affordable.

  • The average student loan payment is $400/month. Look up what yours is at your loan servicer and make a plan for how it will fit into your monthly budget.
  • If you need to lower your monthly payment, you can enroll in a different repayment plan right now and still not have to make payments until they resume. It’ll save you the headache of dealing with delays at your loan servicer, and you’ll be able to plan around what your new monthly payment will be.
  • Summer’s online tools can help you compare income-driven repayment (IDR) plans and enroll in one that’s the best fit for your situation.

4. When payments resume, make sure you have autopay set up at your loan servicer.

  • Typically, you’ll get a small interest rate reduction when you set this up, and it also means that you won’t miss any payments (which can ding your credit score).
  • If your servicer has changed, you may need to set this up again even if you had it set up at your old loan servicer.

5. If you work in public service, lock in PSLF credit.

  • Most of the benefits of the Public Service Loan Forgiveness (PSLF) Limited Waiver are ongoing through this year because of the IDR Adjustment – it’s still estimated that only 15% of eligible borrowers have applied. Depending on your loans, you need to consolidate them to earn the maximum amount of credit: do that before the end of this year to access the expanded benefits, and certify your qualifying employment.
  • Summer can help you determine if you need to consolidate your loans, and can help you complete the process online.

6. If you’re in default, make sure you take steps to get back in good standing.

7. Ask your employer for help!

  • Does your employer help you pay down your student debt? They can! And it’s tax advantaged for them through 2025.
  • A new provision of Secure 2.0 will go into effect next year that also allows your employer to match your student loan payments into your retirement account.
  • Ask your manager or HR team if they offer student loan benefits. If they don’t, now is a great time to start!

If you’re an employer interested in introducing a proven student loan benefit to your employees before loans come due, schedule an intro call or demo to learn how our digital solution can help, with turnkey implementation in under a week.

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