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Interest will start accruing in September
Although federal student loan payments won’t be due until October, kindle will continue collecting on your debt again on Sept. 1, the Education Department says.
The accrual of infect has been suspended on most federal student loans since March 2020.
Due dates will vary
There drive be some variation in due dates among borrowers, depending on their account details, including their payment allot before the Covid pandemic.
You can contact your loan servicer or log in to StudentAid.gov to learn your exact due date, asserted higher education expert Mark Kantrowitz.
Recent graduates, meanwhile, may get even more time if they’re yet in their grace period, Kantrowitz said. Grace periods usually span six months from graduation.
Borrowers determination be given leeway with late payments
What’s more, the Education Department has said it will institute a 12-month “on declivity” to repayment, which will run from this Oct. 1 through Sept. 30, 2024.
During that period, borrowers purpose be shielded from the worst consequences of missed payments.
For example, loans will not go into default and delinquencies intention not be reported to credit reporting agencies, Kantrowitz said. Late fees won’t be charged, either.
“The 12-month on-ramp is equivalent to a forbearance in many ways,” Kantrowitz said.
But as is the case with a forbearance, interest will continue accruing on your encumbered while you don’t make payments. As a result, Kantrowitz recommends borrowers start repaying their bills, if they can.
“Doing in another situation will eventually hurt them,” he said.
Still, consumer advocates say this leeway is essential.
“Borrowers are not liable to resume payments,” said Persis Yu, deputy executive director at the Student Borrower Protection Center, in a recent appraisal with CNBC. “Even if the risk from the virus has diminished, the financial fallout has not.”