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With the Supreme Court rejecting the Biden administration’s student loan forgiveness plan, student loan payments are poised to restart in October 2023. Here’s what you need to know about when and how the forgiveness period is ending and, in light of a warning from the Federal Trade Commission, we share tips for avoiding scams from fraudsters pitching student loan assistance.

Since the start of the Covid-19 pandemic in March 2020, the Department of Education paused payments and set interest rates to 0% on eligible student loans. In August 2022, the Biden administration announced a plan to provide up to $20,000 in debt relief to certain Pell Grant recipients and up to $10,000 in debt relief to non-Pell Grant recipients for individual borrowers earning less than $125,000. But courts put a hold on the debt forgiveness program last November.

In early June, the debt ceiling bill passed by Congress prohibited the DOE from further extending the payment pause. And on June 30, 2023, the Supreme Court issued a decision officially blocking the Biden one-time student debt relief plan. The bottom line: It’s bad news for those counting on continued student loan relief.

The final extension of the student loan payment pause has officially come to an end. Interest on student loans starts accruing again on Sept. 1, 2023, and payments will be due starting in October 2023. The DOE will notify borrowers before payments restart.

The DOE has instituted a 12-month “on-ramp” to repayment that runs from Oct. 1, 2023, to Sept. 30, 2024. During that period, payments are still due, but borrowers who miss monthly repayments will not be considered delinquent, reported to credit bureaus, placed in default or referred to debt collection agencies. But interest will continue to accrue. In addition, a number of options are available for those facing challenges:

• Income-driven repayment: For those whose federal student loan payments are high compared to their income, can help make monthly payments more affordable. The newly announced SAVE Plan, which applies to current and future federal student loan borrowers, will determine payments based on income and family size.
• DOE forgiveness options: Defaulted loans: For those who defaulted on federal student loans before the pandemic, the can help them re-enter repayment in good standing (enrollment is required by September 2024).

Clients of 91��̳ Engines – or their children – who need help determining their repayment strategies can take advantage of our partnership with Savi^* to help them navigate their options.

Additional resources and updated information can be found at the official DOE website.