When the pandemic hit, the US government put federal loans into automatic forbearance — but it won’t last forever
  • Federal student loan forbearance will end on September 30, 2021, if not extended again.
  • Student loan forbearance was previously set to end on January 1, 2021, but has been extended.
  • When forbearance ends, automatic payments will resume and interest rates will return.
  • Read more Personal Finance Insider coverage »

A year ago, the CARES Act put every federal student loan borrower’s loans into forbearance. It temporarily set interest rates at 0%, and stopped all automatic payments. Since its start, it’s been extended several times, most recently through September 30, 2021.

Accounts that use automatic payments will resume at that time, unless forbearance is extended again. Similarly, remaining balances will resume interest rates, and loans will begin accruing interest again. Student loan repayments will pick up where they left off, with borrowers paying the same amount as they did prior to forbearance. If you re-started your payments during the pandemic by calling your loan servicer, your automatic payments will continue.

Other parts of the federal student loan program will also restart. Wage garnishing for anyone who has defaulted on student loans will resume again when forbearance ends. For people on income-driven repayment plans or public service loan forgiveness, payments will be required once again for each month to count towards loan forgiveness. 

Private student loan borrowers didn’t have a pause on their accounts. For these borrowers, payments were still required in recent months, unless otherwise arranged with your servicer or lender.

If you won’t be ready to start making payments, call your student loan servicer or lender as soon as possible

If you’re uncertain of your financial situation, making plans with your student loan servicer should be on your to-do list. 

Calling your student loan servicer is the best way to get in touch with someone about your federal student loan. All federal student loans are assigned to one of 10 companies that collect payments and offer customer service for federal student loans. To find your servicer, log into your Federal Student Aid account or call the  Information Center  at 1-800-433-3243.

While this forbearance only applies to federal student loan borrowers, some private student loan lenders are working with customers to temporarily suspend payments. Call your lender and explain your situation, and find out what options are available. Your options may vary based on which lender you’re working with. 

For federal student loan borrowers, starting to plan for payments sooner rather than later will also give you valuable time to save for later payments if you can’t suspend your payments later. Pausing other loan payments and bills could also free up cash flow. Keeping up with your student loan, if possible, can help you avoid a damaged credit score, or falling into delinquency.

Editor’s note: This post has been updated to reflect the fact that federal student loan forbearance has been extended through September 30, 2021. Additionally, not all Perkins loans are exempt from forbearance, and forbearance can apply to Parent PLUS loans and federally held Federal Family Education Loans.

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