Sedona Arizona

Student loan payments restart

Federal Student Loan payments are scheduled to begin on October 1, 2023. After more than three years of extensions, delays, an executive order, and a pending Supreme Court hearing, you may be wondering what to expect.

A few things to know

First, expect this case to be long from being decided and fully closed. A few things to know:

  • The negotiation of the recent debt ceiling deal called for an end to the COVID-era federal student loan deferment
  • Interest will begin accruing on all federal loans effective September 1, 2023.
  • The Supreme Court has not issued a final ruling on President Biden’s proposed forgiveness of $10,000 for those earning less than $125,000
  • The primary ruling is on the legality of an executive order under the 2003 Higher Education Relief Opportunities for Students (HEROES) Act, which can only be invoked in an emergency or crisis situation… such as a global pandemic
  • The Biden Administration has insisted this proposed forgiveness be a pandemic stimulus response, despite pressure from other leading Democrats to press forgiveness under provisions of the Higher Education Act of 1965
  • If SCOTUS upholds the executive order, details are unknown for when and how the forgiveness would be administered 
  • 26 million people applied for the loan forgiveness program, which is more than half of the estimated 43 million who would qualify

There’s no doubt in my mind this will continue to be a political and economic issue for the foreseeable future. 


Recent surveys suggest upwards of a third of borrowers claim they will be unable to make their original payments. Many borrowers have publicly stated they are refusing to restart payments. 

Many are also pressing for government action to reinstate bankruptcy protection on federal loans. Currently, the only two options available to retire federal student loans is to 1) pay the loan in full, or 2) die. ​​​​​​​

Tips for preparing to pay your student loans

While all of that gets sorted out, what remains true is these student loan payments have not held a spot in your cash flow for more than three years. 

I still personally have federal student loans and have begun planning to reintroduce these payments into our monthly cash flow. 

For those who also have student loans outstanding, I want to share a couple of tips to help you get ready for payments to begin in October:

  1. It’s likely you have a different loan servicer. Navient, FedLoan Servicing, and Granite State are no longer handling federal loans. Watch for communication to come from your servicer.
  2. A reasonable expectation is that your payments will continue at the same payment amount, as the terms of your student loans were essentially frozen during the forbearance and no interest has been accruing. 
  3. Start setting aside your monthly student loan payment amount in a savings account. This will give you three months to make adjustments in other areas as needed.
  4. OR –  go ahead and make your student loan payment interest free for the next two months!
  5. Check with your servicer about any special benefits for autopay. Some may offer a slight rate discount or other bonuses. 

Finally, if you or someone you care about are reviewing monthly cash flow and concerned about the impact of student loan payments, it may be helpful to get another set of eyes on the numbers.

Reach out if I can be helpful in this area – click here to schedule time with me.


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Author: Dale Shafer II, CFP®, APMA®, CDFA®

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