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Student Loan Payments: Here's When You'll Have to Start Paying Again

The end of the pause on payments and interest has been postponed more than a half-dozen times.

Graduation cap with diploma and cash
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After President Joe Biden unveiled his plan to forgive up to $20,000 in student loan debt per borrower, the White House announced student loan payments would resume on Jan. 1, 2023. Payments and interest were suspended in March 2020, at the start of the pandemic, and then postponed eight more times under two administrations.

But with Biden's debt relief program facing numerous legal challenges, the pause was extended again to June -- and could wind up ending even later than that.

"It isn't fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit," Biden said in a video statement in November.

Here's what you need to know about federal student loan payments, including when repayment will restart, which loans are paused and what happens to borrowers in default.

For more on student debt, find out if you should keep paying off your loan during the pause and the benefits of refinancing your student loan.

When will student loan payments and interest resume?

On Nov. 22, Biden declared that the pause was being extended "to no later" than June 30, 2023, in order to give the Supreme Court time to hear the case during this term. 

According to the US Education Department, though, student loan payments and interest are now slated to restart 60 days after legal challenges have been resolved, Should the legal proceedings not conclude by June 30, payments would still resume 60 days later -- on Aug. 29, 2023.

It's always possible the moratorium could be extended again, but experts say that would only be a gambit to buy time, not a permanent solution to the student loan crisis.

The intent is "to make sure borrowers don't have the rug pulled out from under them, rather than an indefinite replacement for loan forgiveness," an unnamed White House aide told The Washington Post in November. 

What does the student loan forgiveness plan provide?

The administration's debt relief program is intended to benefit the more than 45 million Americans who carry a total of $1.6 trillion in outstanding student loans. 

The program would forgive $10,000 in public student loans for individuals earning less than $125,000 per year, or married couples making less than $250,000 combined. 

Borrowers who have federal Pell Grants would be eligible for an additional $10,000 in relief, for a total of $20,000 in student loan forgiveness. 

Which student loans are currently paused?

The moratorium on student loan payments and interest includes all federally held student loans, regardless of what company is servicing the loan. Eligible student loans include:

  • Direct federal student loans
  • Federal Family Education Loan program loans held by the Department of Education, aka FFEL
  • Federal Perkins Loans held by the Department of Education
  • Defaulted FFEL loans not held by the Department of Education
  • Defaulted Health Education Assistance loans, aka HEAL

Student loans that are not eligible include:

  • Nondefaulted FFEL loans not held by the Department of Education
  • Federal Perkins Loans not held by the Department of Education
  • Nondefaulted HEAL loans
  • Private student loans

If your student loans are eligible, payments and interest were automatically paused on March 13, 2020. If you're not sure whether your loan payments are paused or not, contact your loan servicer.

What are the legal challenges to the student loan forgiveness plan?

In November, a Texas judge ruled that Biden's plan to erase as much as $20,000 in student loans per eligible borrower was an unconstitutional use of legislative powers by the executive branch.

The Justice Department originally argued that the Higher Education Relief Opportunities for Students Act of 2003 (the Heroes Act) gave the administration license to "alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies."

But Judge Mark Pittman ruled that the Heroes Act  "does not provide the executive branch clear congressional authorization to create a $400 billion student loan forgiveness program."

The White House appealed Pittman's ruling, but a federal appeals court issued an injunction against the relief plan during the appeals process.

There are also other legal hurdles: In September, Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina filed suit, claiming Biden's plan threatened tax revenues from companies that invest in and service student loans.

"It will unfairly burden working-class families and those who chose not to take out loans or have paid them off with even more economic woes," Missouri Attorney General Schmitt said in a statement at the time. "The Biden Administration's unlawful edict will only worsen inflation at a time when many Americans are struggling to get by."

District Judge Henry Autrey threw out the lawsuit on the grounds that the six states failed to establish legal standing. But the attorneys general in the Republican-dominant states have already appealed Autrey's decision.

Another challenge, by the Wisconsin-based Brown County Taxpayers Association, was rejected by Supreme Court Justice Amy Coney Barrett on Oct. 20. 

What happens to borrowers who were in default?

Borrowers in default will automatically be given a "fresh start," according to the US Department of Education.

All defaulted accounts will be returned to good standing, and any delinquencies will be "cured," allowing borrowers to repair their credit and access programs like income-driven repayment plans and Public Service Loan Forgiveness, a student loan relief program designed for borrowers who work for the government or nonprofit organizations.

Since the federal student loan payment pause began in March 2020, collections on defaulted debts have been put on hold.

In an April 2022 statement, Secretary of Education Miguel Cardona said, "During the pause, we will continue our preparations to give borrowers a fresh start and to ensure that all borrowers have access to repayment plans that meet their financial situations and needs."