Do you have a federal student loan? If you have an account with a balance, you need to be aware of a major change that will happen shortly. After more than two years on pause, interest on federal student loan debt will resume on Sept. 1, 2023, and payments will restart in October 2023. The resumption will impact 44 million Americans holding $1.7 trillion in federal student loan debt including those with a Direct Plus Loan.
It’s important to have a repayment plan for your federal student loan in place before payments restart. Everyone will face a different situation in terms of what they qualify for in a repayment plan, the amount of debt they have, and which loan servicer they are working with. If you have a federal student loan of any kind, take these steps to prepare for repayment.
- Contact your loan servicer
- Update your contact information
- Search and apply for repayment plans
- Find out your monthly payment amount
- Make your payment
Managing the resumption of payments may present financial challenges for some. If you are worried you may struggle to make required payments, consider the following resources for assistance.
Borrowers will be protected from their credit reports being negatively impacted by missed payments. However, interest will still accrue on the debt amount during this time.
IDR plans determine monthly student loan amounts based on income and family size. This plan could lower your payment or even get rid of required payments completely.
If you have a short-term financial issue, you may qualify to have your payments temporarily suspended through deferment or forbearance. However, interest will still accrue on the debt amount during this time.
If you need guidance, talk to a Cinfed Financial Coach. We can help re-organize your budget, manage your finances, and help find additional solutions. Visit our Branches & ATMS page to schedule an appointment at your nearest branch location.