Student Loans Payment Resume: This is how a government shutdown could affect your payment

As the looming government shutdown continues to dominate headlines, another important deadline is fast approaching – the return of student loan payments on October 1st. While lawmakers are still working to prevent a shutdown, a recent attempt to move forward with a defense funding bill was met with opposition from a group of Republican colleagues, causing a sudden standstill in the House.

Despite the potential for a government shutdown, October 1st remains the date when student loan borrowers will be required to resume monthly payments for the first time since March 2020.

While this has been expected for months, some loan servicers have reportedly struggled to keep up with the influx of borrowers seeking assistance. A government shutdown could only exacerbate these issues.

According to the Department of Education, servicing federal student loans and disbursing Pell Grants and Federal Direct Student loans “could continue for a very limited time” during a shutdown, but “these operations could also experience some level of disruption.”

It’s worth noting that the department’s contingency plan hasn’t been updated since 2021 when interest wasn’t accruing and payments weren’t required for student loans.

Loan borrowers should be prepared

As October 1st approaches, it’s important for student loan borrowers to be prepared to resume their monthly payments. Those who are struggling to make payments should reach out to their loan servicer for assistance.

It’s also worth noting that there are various repayment plans and forgiveness programs available for federal student loans, so borrowers should explore their options if they’re having difficulty making payments.

While the government shutdown remains a possibility, it’s important for borrowers to stay informed and prepared. As House Speaker Kevin McCarthy continues to face opposition from his own party, it’s unclear what the future holds for both the defense funding bill and the potential for a government shutdown. In the meantime, borrowers should focus on ensuring that they’re ready to resume their student loan payments come October 1st.