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  • NASW-IL Staff

Student Loan Payments to Resume: What You Need to Know

Reprinted from National NASW

It’s a busy time for student loan borrowers! Several new programs have been announced, and payments are set to resume later this year. Read on for a summary of everything you need to know to prepare for payments to resume.

Payments Will Resume This Fall

It’s official! After more than three years, student loan payments will resume this fall for federal student loan borrowers. The recent debt ceiling agreement prevents further extensions of the payment pause, and the Department of Education will begin collecting payments again later this year. Interest will resume on September 1, 2023, and payments will be due in October. Your student loan servicer will contact you with your due date and payment amount before your payment is due.

Proposed One-Time Debt Relief

In August of 2022, President Biden announced the Biden-Harris Administration’s One-Time Debt Relief program designed to help borrowers with the burden of student loan debt. This program would have provided eligible student loan borrowers with up to $10,000 in cancellation and up to $20,000 in debt cancellation for Pell Grant recipients.

However, ongoing lawsuits put this program on hold. The Supreme Court heard oral arguments in February 2023, and NASW is disappointed that on June 30, 2023, the Supreme Court struck down the plan, ruling that the President cannot cancel student loans through Executive Action. This means the Department of Education cannot proceed with issuing $10-20k in debt relief for borrowers.

A New Way to RePAYE

There is good news. To help borrowers with repaying their loans, the Department of Education will release a new repayment plan later this year, lowering monthly payments for borrowers across the country. This new plan will calculate monthly payments at 5% of your discretionary income for undergraduate loans, down from the current 10%. For borrowers with both undergraduate and graduate loans, your monthly payment will range from 5-10% of your discretionary income, depending on your ratio of undergraduate to graduate loans. In addition, this new plan will change the discretionary income requirements, meaning less of your income will be included when calculating your payment and a lower monthly payment. And perhaps best of all, this new plan will cover any unpaid interest, that way your loan balance never increases!

A Fresh Start for Borrowers in Default

For borrowers who are in default, the Department of Education has created a new program called Fresh Start, designed to bring you out of default and back into good standing quickly and easily. To take advantage of this program, simply call your collections agency and tell them you’d like to opt-in to Fresh Start. You’ll be transferred to a new servicer, brought out of default, and your loan will be reported as in good standing. The process only takes about a month, so if you’re in default, call your collections agency to opt in today!

Payments Will Resume This Year, Are You Ready?

Since payments will be resuming later this year, now is a great time to prepare to re-start repayment. Ensure you update your contact information on so your servicers can reach you. If you are concerned about your ability to make your payment, you can explore personalized repayment options using the NASW Savi tool at NASW partnered with Savi, a student loan technology company that provides resources and expertise to help members understand, manage, and repay student loan debt.

The free Savi Student Loan Tool analyzes your repayment options and forgiveness programs to help you find your best solution. By completing a free application, you can see the repayment plans you qualify for and which are most affordable, and explore your options for loan forgiveness. If you purchase an Essential account, Savi also provides individual one-on-one support at a steeply discounted rate for NASW members.

The goal is to take the stress out of managing your student loans. NASW member Gregory P. said, “With SAVI's help, I stopped worrying. I was being guided through the process by a knowledgeable team who would help me every step of the way. And every cent of the debt I had been carrying around for many years was forgiven. It is life-changing.”

After working with Savi, Gregory received almost $77,000 in loan forgiveness! Another NASW member, Rodney W. says, “I genuinely feel more knowledgeable about my student loans and options; having SAVI available helps relieve some of the stress.”

Meanwhile, NASW Continues to Work for Policy Level Solutions

While Savi and other student loan calculators provide practical help for individual borrowers, NASW continues to advocate for policy changes concerning student debt. NASW actively monitors opportunities to make progress, having achieved a significant victory in securing the Public Service Loan Forgiveness (PSLF) waiver. NASW participates in the PSLF coalition, maintains a close partnership with the Student Borrower Protection Center, and supports student loan debt relief through various avenues, including forgiveness, cancellation measures, employer-sponsored relief, and scholarships. Expanding PSLF eligibility to include social workers employed by nonprofits and for-profit organizations is a key objective. Through continuous monitoring, strategic partnerships, and active engagement, NASW remains committed to addressing student debt challenges and advocating for social workers' needs.

Visit Savi to see how this service can help you navigate the loan repayment process and confirm whether you can apply for student debt forgiveness.

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