Student loan restart: Payments to begin again as federal pause ends in one day

Millions of borrowers will have to resume their monthly payments when the COVID-19-era pause on student loan payments ends in one day.

The amount borrowers owe for the first payment and its due date will be sent out 21 days before the deadline, according to the Department of Education. Payments will resume for borrowers as soon as Oct. 1, regardless of if the government shuts down.

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Student loan payments were paused for borrowers when the coronavirus pandemic hit the United States in full force in March 2020, and since then, the pause has been extended numerous times by the Biden administration. As the pandemic has ended in the U.S., payments are set to resume in October.

Interest on outstanding student loans already resumed on Sept. 1 after it had been paused since March 13, 2020.

While payments do resume next month, if borrowers are unable to begin paying their loans off at that time, a “temporary on-ramp” will exist through Sept. 30, 2024. Borrowers will not be reported as delinquent on their payments if they cannot pay them until next year.

“Payments are still due, and interest will continue to accrue (add up). We will not report you as delinquent during the on-ramp, but we do not control how credit scoring companies factor in missed or delayed payments,” the Department of Education said on its website.

This temporary on-ramp solution is available for those with direct loans, Federal Family Education Loan Program loans held by the Education Department, Federal Perkins Loans held by the Education Department, defaulted Federal Family Education Loan Program loans not held by the Education Department, and defaulted Health Education Assistance Loan Program loans.

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Not all borrowers will resume payments in October. Those who graduated this spring will not have to begin making payments until their grace period ends, which is usually six to nine months after graduating from college.

Despite the looming threat of a government shutdown, student loan payments will resume regardless of if the government is funded.