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In Case You Missed It…Student Loans Have Resumed Accruing Interest

For millions of Americans, student loans are a significant monthly expense. The relief brought by the temporary suspension of interest and payments during the COVID-19 pandemic has been a welcome respite. However, as of September 1, 2023, the interest on federal student loans has resumed. Payments will resume in October for millions of borrowers. In this comprehensive article, we'll explore the implications of this change, offer advice on how to prepare for the transition, and delve into the broader context of student loan debt in the United States.

The Pandemic Pause

When the COVID-19 pandemic hit, the U.S. government took swift action to provide economic relief to struggling borrowers. As a part of this effort, the accrual of interest on federal student loans was temporarily suspended. This meant that borrowers did not have to make payments, and their loan balances remained frozen, preventing interest from piling up. This pause offered significant relief for countless individuals grappling with the financial impacts of the pandemic.

The End of the Pause

While the suspension of interest and payments was a significant relief for borrowers, it was always intended to be a temporary measure. On September 1, interest started accruing once again on federal student loans. This change will affect both current students and those who graduated before the pandemic.

Implications for Borrowers

1. Budget Adjustment: It's essential to review your budget and financial situation. Make sure you're prepared for the increase in loan payments and plan accordingly. This may require cutting unnecessary expenses or seeking additional sources of income.

2. Explore Repayment Options: Federal student loans offer various repayment plans, some of which are income-driven. If you're worried about resuming monthly payments, consider switching to a plan that aligns better with your income. These plans can provide relief by capping your payments at a percentage of your income.

3. Seek Professional Advice: If you're uncertain about how the resumption of interest will impact your specific situation, it's a good idea to consult with a financial advisor or student loan expert. They can help you develop a strategy tailored to your needs, including evaluating eligibility for loan forgiveness programs.

4. Refinancing: For some borrowers, refinancing their federal loans into private loans may be an option. However, this should be approached with caution, as it may result in the loss of certain federal loan benefits, such as income-driven repayment plans and loan forgiveness programs.

5. Strategic Job Search: Keep an eye out for student loan repayment benefits offered by potential employers. It may be worth considering prioritizing positions with these benefits over others, especially if your student loan burden is substantial. This strategic approach to job hunting can lead to decisions that align better with your long-term financial goals, as you seek employment opportunities that not only match your skills but also provide financial relief through loan repayment assistance.

The Future of Student Loan Relief

The resumption of interest on federal student loans is a significant policy change that will affect millions of borrowers. It's important to stay informed about any potential developments in student loan relief programs. The government may introduce new measures or extend existing ones in response to economic conditions and the needs of borrowers.

The Broader Context

Beyond the resumption of interest, the issue of student loan debt in the United States remains a hot-button topic. It's a complex issue with wide-ranging implications for borrowers, the economy, and higher education.

1. Mounting Student Loan Debt: The total outstanding student loan debt in the United States has reached staggering levels - about $1.77 trillion. Many borrowers face the challenge of repaying loans that often exceed their annual income.

2. Policy Debates: Policymakers continue to debate potential solutions to the student loan crisis, including loan forgiveness programs, interest rate reforms, and improved access to affordable education. President Biden’s debt cancellation policy was overturned by the U.S. Supreme Court earlier this summer, but the administration has still attempted to provide relief to borrowers with a yearlong grace period on loan defaults.

3. Economic Impact: High levels of student loan debt can delay major life milestones such as buying a home, starting a family, or saving for retirement, which can have broader economic repercussions.

4. Higher Education Costs: The rising cost of higher education is a significant driver of student loan debt. Addressing this issue requires a comprehensive approach that includes both loan relief and efforts to make education more affordable.


As the temporary suspension of interest on federal student loans ends on September 1, 2023, borrowers should be prepared for the financial implications. Review your budget, explore repayment options, and seek professional advice if needed. While the return of interest may be challenging, staying informed and proactive can help you navigate this transition and manage your student loan debt effectively. Moreover, in today's job market, having a student loan repayment benefit offered by potential employers is an added strategic advantage. Consider positions that include this benefit as you search for opportunities that not only match your skills but also provide financial relief through loan repayment assistance.

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