The Student Loan Repayment Pause Has Ended: 5 Things You Need To Know
June 6, 2025
For many Americans, the government's student loan payment break, which started in 2020 because of the COVID-19 pandemic, gave people much-needed financial relief. However, as you've probably heard, that payment pause has now officially ended. During the recent payment pause, interest rates on federal student loans were set at 0%. With the pause now over, these loans will revert to their original fixed interest rates as repayments resume.
This means millions of people are back to making payments. If your loans are behind or in trouble, understanding what this means for you and what options you have is very important.
1. Confirm your Loan Servicer
After over three years of forbearance, it's highly possible your student loan servicer has changed. During the payment pause, several federal student loan servicers consolidated, meaning your loans might now be managed by a different company. To see where your students loans are currently held login to studentaid.gov and follows these steps and navigate to "My Aid" in your dashboard.
Remember that the repayment pause only applied to federal student loans. Private loans (loans from banks, not the government) were never part of the pause and have always followed their original payment rules.
2. Update Your Contact Information
On studentaid.gov you can check to make sure your home and email addresses are up to date. Having correct contact information is essential for getting important updates such as:
- Billing statements: These statements tell you when your payments are due and how much you owe. Miss a statement, and you could miss a payment.
- Repayment plan changes: If you're on an Income-Driven Repayment (IDR) plan, you'll receive annual reminders to recertify your income and family size. Failing to do so can cause your payments to spike.
- Default warnings: If you're struggling to pay, your servicer will send warnings before your loan goes into default, a status with severe financial consequences.
3. Understand Your Loan Status
Your "loan status" tells you where your loan is in its repayment journey. It's important because it dictates whether you need to make payments, whether interest is growing, and what options you have.
What does it mean to be in default or delinquent?
Being in default means you haven't made a scheduled payment for more than nine months. If you default on a federal student loan, you also lose the chance to get other federal student aid and could face serious legal problems. What does it mean to be delinquent?
Delinquency is less severe than default, but is still a problem. It means you've missed payments for about three months, but haven't yet reached the nine-month mark for default. Being delinquent will likely cause negative marks on your credit score.
For those with defaulted federal loans, this means you could face consequences like:
- Credit Score Problems: Negative marks on your credit report can make it harder to get future loans, housing, or even some jobs. Check your credit score any time within the SNB mobile app.
- Wage Garnishment: A part of your paycheck could be legally taken out to pay back your debt.
- Tax Refund Taken: Your federal tax refund could be taken to pay off what you owe.
- Other Penalties: You might face additional money or legal problems.
How do these statuses affect my credit score?
For delinquent accounts, late payments reported by your loan company will show up on your credit report. Both late payments and eventually defaulting can stay on your credit history for up to seven years, seriously impacting your financial standing.
Will I be sent to collections or have my wages taken?
You might be sent to collections if you did not make federal student loan payments for nine months or longer before March 2020 and your loan was considered in default. This will also appear on your credit report.
If you are in default and your wages might be taken, you should be contacted by mail (at your last known address) about 65 days before the garnishment begins. You may be able to avoid garnishment by starting a repayment plan during this 65-day period or by entering into a rehabilitation agreement and making the first five of the nine required payments.
4. Explore Repayment Options
Once you understand your current loan status, the next critical step is to explore your repayment options. Choosing the right plan can significantly impact your monthly budget, the total amount you repay, and even your path to potential loan forgiveness.
- Loan Simulator: Use the loan simulator tool on studentaid.gov to compare different repayment options and find the best fit for your needs.
- Income-Driven Repayment (IDR) Plans: These plans adjust your monthly payment based on your income and family size. The SAVE Plan (Saving on A Valuable Education) is the newest IDR plan and offers significant benefits, especially for those with lower incomes or only undergraduate loans.
- Temporary Pauses (Deferment of Forbearance): These can temporarily halt or reduce payments, but interest often continues to accrue increasing overall loan cost.
- Loan Consolidation: This can simplify repayment by combining multiple federal loans into one, resulting in a single monthly payment. However, it may not lower your interest rate and could sometimes mean losing certain benefits of the original loans.
5. Be Wary of Scams
Federal loan servicers will help you for free. You should never have to pay for assistance with your federal student loans. Check out our article on common student loan forgiveness scams and how you can avoid them.
The end of the federal student loan payment pause is a big change for many borrowers. Taking action now to understand your repayment status and explore the options available is essential for keeping your finances healthy.
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