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Restarting Repayment After the COVID-19 Payment Pause
Restarting Student Loan Payments
IMPORTANT: In August 2024, a federal court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans, including—for example—SAVE’s monthly payment formula and loan forgiveness under the SAVE, PAYE, and ICR Plans. As a result, SAVE plan borrowers are being placed in administrative forbearance. If you are enrolled in the SAVE plan, you will not need to make loan payments and your loans will not accrue interest during this time. For updates, see StudentAid.gov/saveaction.
Following a pandemic-related payment pause that ended in October 2023 and an “on-ramp” period to repayment that concluded in October 2024, it may have been some months – or even years – since you have had to make loan repayments. Many borrowers must make payments, or it will affect their credit. Use these tips to help you plan restarting student loan payments.
Federal Student Loan Holders
Where to Start
- To understand the specifics on each type of federal loan, read the Federal Student Aid Loans page.
- The federal government has offered several programs to eliminate the burden of student debt in recent years. By logging in to your Federal Student Aid (FSA) account, you can confirm the exact amount you owe and through which servicers.
- If you don’t repay your loan in a timely manner, delinquent payments may impact your overall financial health and damage your credit score. As a last resort, borrowers can request a temporary deferment or forbearance.
Restarting Payments
- Once you know how much you owe, you can use the Department of Education’s Loan Simulator to compare repayment plans. An income-driven repayment (IDR) plan will lower monthly costs for many borrowers.
- Look into loan forgiveness and debt restructuring options. For example:
- Public Service Loan Forgiveness: Borrowers who are or have been employed in government service or non-profit organizations and have been making payments on their loans for 10 years (120 months) may be eligible to have their loans forgiven. Read DCWP’s Public Service Loan Forgiveness (PSLF) page for more information.
- Public Service Loan Forgiveness: Borrowers who are or have been employed in government service or non-profit organizations and have been making payments on their loans for 10 years (120 months) may be eligible to have their loans forgiven. Read DCWP’s Public Service Loan Forgiveness (PSLF) page for more information.
- To learn more about each of the options above or to explore other options that may be available to you, you can get in-person help by meeting with a financial counselor for free at an NYC Financial Empowerment Center.
Other Student Loan Holders
Private loans are made by banks or other financial institutions and are private contracts between the borrower and the institution. They were not automatically paused during the pandemic and must be individually negotiated with the financial institution. Have private student loans? Visit the Consumer Financial Protection Bureau website to learn about your options.
Student loan debt shouldn’t mean student loan stress. NYC Financial Empowerment Center counselors can help you lower monthly payments, explore loan options and forgiveness programs, or get out of delinquency or default, depending on your loans. Learn more and book an appointment for free one-on-one financial counseling.
Page updated 10/2024