As President Joe Biden is all set to sign the debt ceiling bill, the student loan pause is about to end in the upcoming months. This pause will end 60 days after the 30th of June 2023. This will be on 29th August 2023. After this date, interest on the education loan will start again.
However, federal student loan borrowers will not have to resume payments immediately. From 29th August 2023, the US Education Department will generate federal loan repayment billing statements. After statement generation, the loan servicing team of the department will send them to the borrowers. These bills will provide beneficiaries with a significant time to make their initial payment.
So, due to the relief, student loan borrowers will have to start paying their dues in late September or early October. Additionally, the Fresh Start Program of the Biden administration will also provide relief to many borrowers.
Fresh Start Program
Here are some details of the Fresh Start Program:
- It is a temporary program provided by the U.S. Department of Education (ED) that offers specific advantages to individuals who have defaulted on their federal student loans.
- This program automatically provides benefits that include the reinstatement of eligibility for federal student aid, including loans and grants.
- William D. Ford Federal Direct Loan (Direct Loan) Program Loans, Perkins Loans, and Federal Family Education Loan (FFEL) Program are eligible for Fresh Start Program.
Other Student Loan Forgiveness Programs
Moreover, the Education Department will also process student loans under the following student loan forgiveness programs:
- Public Service Loan Forgiveness (PSLF) Program
- Income-Driven Repayment (IDR) Account Adjustment Plan