Student Loan Payments: Know important dates as repayment resumes after break

After a break of three-and-a-half years, student loan payments and interest on such loans begin on September 1. This may impact millions of students across the country. According to the New York Federal Reserve, 44 million students have taken loans valued at $1.6 trillion at the end of March 2023.

August 1

The Biden administration has launched the Saving on a Valuable Education or SAVE plan, which allows the monthly exemption from 150% to 225% of the poverty line. It may cut the monthly payment by half for some borrowers and some other borrowers will not have to make any payment at all.


Also in August, a borrower can opt for Autopay which may reduce the interest by 0.25%.

August 31

If a borrower does not want to pay in September, he will have to inform by this date and an administrative charge will be levied on the loan.

September 1

If a borrower does not want to pay in September, he may inform by this date, but he will have to pay interest for this period.

October

The first payment is due in the month of October.

December 1

If a person has loans, not held by the Dept. of Education, he can choose to consolidate all such loans into one loan called Direct Consolidation Loan by December 1. He may claim credit for the loan under the IDR Account Adjustment scheme.

July 1, 2024

According to the Biden Administration scheme, a loan may be reduced from 10% to 5% of income above 225% of the poverty line, consequently slashing the loan by half.

Under the student loan forgiveness scheme of the administration, loans up to the remaining balance of $12,000 or less after making payment for a decade, can be forgiven completely.

September 30

Borrowers who have not made monthly payments from October 1, 2023, to September 30, 2024, will not be declared delinquent. But, the unpaid student loan amount not paid after this date will become delinquent.

FAQs:

What is a Student loan forgiveness program?
Under the student loan forgiveness program, any loan up to the remaining balance of $12,000 after making payments for a decade, can be forgiven.

How many students have taken loans?
The New York Federal Reserve has said in its report that 44 million students have taken education loans and the consolidated amount across the country is valued at $1.6 trillion.