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Penn’s Office of Student Registration & Financial Services is reminding student, parent, and alumni borrowers who are in repayment status and may still owe on a federal student loan that the payment pause enacted due to the COVID-19 pandemic has ended. As a result, interest on federal student loans began to accrue again on September 1, and payments will resume in October.
There are many resources available to you to help you navigate the return to repayment.
Students who are currently enrolled at least half-time will not enter repayment at this time. Repayment on most federal student loans begins six months after a student borrower separates from the university or drops below halftime enrollment.
If a student is currently enrolled at least halftime at Penn but have been notified by their federal loan servicer that they’re going into repayment, they should reach out to the SRFS Student Service Center to verify their enrollment status.
Interest accrual began on September 1, 2023. Repayment will begin in October 2023. If a student borrowed Federal Direct Loans, their grace period is six months (not including Direct Consolidation loans). Students with any other federal loan types should research their grace periods.
Spring 2023 graduates have a six-month grace period from their date of graduation before entering repayment. If a student graduated in the spring but continued their education with at least halftime enrollment, their loans will remain in deferment.
A loan servicer is the company that manages a student’s federal student loans. Servicers should contact borrowers and send them a bill, which includes the payment amount and due date, at least 21 days before payment is due. Anyone who has not heard from their loan servicer, or is unsure who services their loan, is encouraged to log in to the Federal Student Aid dashboard to find their loan servicer.
To compare loan repayment options, Student Registration & Financial Services recommends students use the Loan Simulator available on the Federal Student Aid website. This tool allows students to estimate monthly payments and timelines for all plans they’re eligible for at this time.
When a student enters repayment, they are automatically enrolled in the Standard Repayment Plan, which is a 10-year repayment plan with a minimum monthly payment based on their overall borrowing.
A student’s best point of contact is their loan servicer. Students can identify their servicer by logging in to view their loans at studentaid.gov.
The Federal Student Aid website has educational materials to help understand how repayment works.
Additional Tips
SRFS encourages borrowers to take some additional steps before repayment begins:
- Verify and update your Social Security Number on your academic record. While not required for admission, your SSN is required to ensure your enrollment is reported to the National Student Loan Data System (NSLDS).
- Update contact information on your loan servicer's website and in your Student Aid profile.
- Review your auto-debit enrollment or sign up for the first time. To do so, log in to your loan servicer’s website or contact your loan servicer directly.
- Consider whether it is beneficial to apply for the new SAVE Plan. The Saving on a Valuable Education (SAVE) Plan is an income-driven repayment (IDR) plan that is intended to lower student debt. The SAVE plan calculates payments based on a borrower’s income and family size instead of their loan balance and forgives remaining balances after a certain number of years.
To help borrowers successfully return to repayment, the U.S. Department of Education also created a temporary on-ramp period through Sept. 30, 2024. This on-ramp period protects borrowers from having a delinquency reported to credit reporting agencies. This prevents the worst consequences of missed, late, or partial payments. However, payments are still due, and interest will continue to accrue during this time.
More information about the on-ramp period, as well as resources to help borrowers prepare for student loan payments to resume, can be found at StudentAid.gov.
