Student Loan Payments Are Resuming: What It Means and How to Prepare

May 6, 2025 admin Debt Management, Financing and Loans, For Students, Personal Finance, Repayment Strategies, Student Credit Tips, Student Loan Basics

After a long pause, federal student loan payments are back — and for millions of borrowers, that means it’s time to revisit your loan servicer, update your contact info, and get ready for monthly payments again.

The Trump administration has announced the resumption of collections on defaulted student loans and is ending the extended pandemic-era protections. Here’s what this means, when it starts, and what steps you should take right now.

💬 What Does “Resuming Collections” Mean?

During the COVID-19 emergency, the federal government:

  • Paused all student loan payments
  • Dropped interest rates to 0%
  • Suspended collections on defaulted loans

Now, the pause is ending, and collections on defaulted federal student loans will resume — including wage garnishment, tax refund offsets, and other enforced recovery actions.

🗓️ When Will Student Loan Payments Restart?

  • Payments already resumed in October 2023 for most borrowers
  • Collections on defaulted loans are now being phased back in starting in 2025 under the new administration
  • Expect full enforcement of default-related collections to return mid-2025, with notices sent in advance

Borrowers in default may receive letters or emails from their loan servicer or the Department of Education soon.

🧭 What You Should Do Now

✅ 1. Log Into Your Loan Servicer

  • Find out who your servicer is at https://studentaid.gov
  • Update your address, phone number, and email
  • Check your loan balance, interest rate, and monthly payment

✅ 2. See If You’re In Default

  • If you haven’t made payments in a long time, your loan may already be in default
  • Log into your StudentAid.gov account and review your loan status
  • If you’re in default, you may be eligible for Fresh Start, a one-time program to get out of default

✅ 3. Sign Up for a Repayment Plan

You don’t have to restart the same plan you had before. Explore:

  • Income-Driven Repayment Plans (IDR) — Payments based on your income and family size
  • SAVE Plan (newest IDR plan) — $0 monthly payments for low-income borrowers
  • Extended or Graduated Plans — Lower monthly payments over longer terms

Use the Loan Simulator on StudentAid.gov to find the best plan for your budget.

✅ 4. Consider Consolidation or Rehabilitation (If in Default)

If your loans are in collections:

  • Loan Rehabilitation allows you to make 9 on-time monthly payments to remove the default
  • Loan Consolidation lets you combine loans into one and return to good standing faster (typically quicker but waives some benefits)

Under the Fresh Start initiative, you may be able to restore your loans to good standing without waiting 9 months — but you must act before the program ends.

✅ 5. Avoid Scams

Now that payments and collections are resuming, scammers are targeting borrowers. Don’t trust any service asking for payment to “help lower your loan” — use only official resources like StudentAid.gov or your verified loan servicer.

🛡️ What If You Can’t Afford Payments?

You have options:

  • Apply for an income-driven repayment (IDR) plan — you could qualify for $0 payments
  • Request a forbearance or deferment (though interest may accrue)
  • Explore forgiveness programs if you work in public service or education
  • Don’t ignore the loans — contact your servicer and work out a plan to avoid default

🔄 What’s Next?

  • Watch for notices from your loan servicer or the Department of Education
  • If you’re in default, expect collections to restart by mid-2025
  • Take advantage of Fresh Start or IDR options now before interest and penalties increase your balance

Student loans are confusing — and resuming payments after a long pause can be stressful. But taking small steps now can help you avoid late fees, credit damage, or wage garnishment later.