How to Prepare for a Student Loan Payment Restart

What this means

When student loan payments restart after a pause, your loan servicer will begin sending bills again. The payment amount may be different from what you paid before, especially if you were on a plan that was discontinued (like SAVE) or if your income has changed. Federal law requires servicers to notify borrowers at least 21 days before the first payment is due after a pause.

The SAVE Plan was vacated by a federal appeals court ruling in 2024, affecting millions of borrowers who were enrolled or in the process of enrolling. If you were one of them, your loans were likely placed in administrative forbearance while the Department of Education transitioned borrowers to other plans. Federal law

During this transition period, interest may or may not have accrued depending on the specific forbearance type applied to your account. If you were in an interest-free forbearance, your balance stayed the same. If not, unpaid interest may have been capitalized (added to your principal balance) when payments resume, increasing the total amount you owe over time.

Who may be affected

• Borrowers who were on the SAVE Plan before it was vacated by court order
• Borrowers whose loans were in forbearance during the SAVE transition
• Borrowers who need to select a new income-driven repayment (IDR) plan
• Any borrower whose payment amount or due date may have changed
• Borrowers who previously had $0 payments under SAVE and now face a higher amount under IBR or ICR

Available repayment plans after SAVE

With the SAVE Plan no longer available, borrowers must choose from remaining options. Each has different eligibility requirements and payment calculations:

• Income-Based Repayment (IBR) — payments are 10-15% of discretionary income depending on when you first borrowed. Forgiveness after 20 or 25 years. Federal law
• Income-Contingent Repayment (ICR) — payments are the lesser of 20% of discretionary income or what you would pay on a fixed 12-year plan. Forgiveness after 25 years. Federal law
• Pay As You Earn (PAYE) — payments are 10% of discretionary income (for eligible new borrowers after 2007). Forgiveness after 20 years. Federal law
• Standard Repayment — fixed payments over 10 years. Highest monthly payment but lowest total interest paid.
• Graduated Repayment — payments start low and increase every two years over a 10-year term.
• Extended Repayment — for borrowers with more than $30,000 in loans. Fixed or graduated payments over up to 25 years.

Step-by-step: prepare for your payment restart

What to check before your first payment

• Your current repayment plan status on StudentAid.gov
• Whether your loans are currently in forbearance
• Your new monthly payment amount (verify with your servicer)
• Your first payment due date
• Whether you're enrolled in auto-pay (consider the 1% rate reduction available through June 2028) Federal law
• Whether you qualify for an income-driven repayment plan
• Whether any interest was capitalized during your forbearance period
• Whether your servicer has your correct contact information (email, phone, mailing address)

Understanding interest capitalization

When payments resume after a forbearance period, any unpaid interest that accrued during the pause may be capitalized — meaning it gets added to your principal balance. This increases the total amount you owe and means you pay interest on a larger balance going forward. Not all forbearance types result in capitalization, so check with your servicer about whether this applies to you.

If your interest was capitalized, your new monthly payment may be higher than what you paid before the pause, even if you're on the same repayment plan. This is because the payment is calculated based on your total loan balance, which is now higher.

If you choose...

If you choose to prepare now:

• You'll know your exact payment amount before the first bill arrives
• You can select the repayment plan that best fits your income
• You can budget for the new expense and avoid overdrafts
• You may qualify for a lower payment through an IDR plan

If you choose to wait:

• Your servicer may assign a repayment plan for you (which may not be the cheapest option)
• You risk missing your first payment if you don't know the due date
• A missed payment starts the delinquency clock (late fees, credit reporting after 90 days)
• You lose the chance to plan your cash flow before the payment hits

Here's what you can do today

1. Log in to StudentAid.gov and check your current loan status, servicer, and repayment plan.
2. Call your loan servicer and confirm your new payment amount and first due date.
3. If you don't know your servicer, use the Find Your Servicer guide.
4. Compare available repayment plans and switch if a better option exists for your income.
5. Use Balance On Hand to project your cash flow for the next 30 days with the new payment included.

Before making a financial decision, understand your cash flow.

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