Source: Consumer Financial Protection Bureau (CFPB)

In October, millions of federal student loan borrowers will have a payment due on their loans for the first time since March 2020. Many borrowers may be able to reduce their payments or even get their loans cancelled, and they should explore their options before making payments. Borrowers who encounter issues with their student loans should submit a complaint with the CFPB.

For millions of borrowers, restarting student loan payments is a serious shift in their financial circumstances, especially as many of those borrowers will be making payments for the first time since graduating. CFPB research has found that many student loan borrowers are already behind on their payments on other types of debt and at risk of delinquency on their student loans, and this may only worsen as student loan payments resume. Borrowers may be entitled to reduce their loan payments or even to cancel their loans through income-based repayment programs and other loan cancellation options. Before making payments, borrowers should explore the potential to reduce or eliminate their student debt burden.

Unfortunately, the CFPB has found in the past that some student loan servicers have made it harder for borrowers to access lower payments and loan cancellation programs. Our complaint monitoring, enforcement and supervision efforts have uncovered red tape, errors, delays, and even illegal practices that left borrowers paying more than they should.

As borrowers prepare for student loan payments to resume, CFPB is working to ensure that servicers follow the law and that consumers are protected. We will be looking closely at loan servicers’ practices, borrower outcomes, information from fellow regulators, and issues raised through consumer complaints.

If you’re starting your student loan repayment in October, here’s what you need to know and what to do if you run into issues with your student loan servicers.

What you need to know

• Cancellation options are available.  The Department of Education recently discharged, or cancelled, more than $116.6 billion in loans under a variety of programs to help borrowers, but many more borrowers are likely eligible. In particular, borrowers who have been in repayment for more than 20 years or borrowers who took out less than $12,000 in loans and have been in repayment more than 10 years may qualify for cancellation under the Department of Education’s new Saving on a Valuable Education or “SAVE” plan . Borrowers who work at qualifying employers such as non-profits or government agencies may be eligible for Public Service Loan Forgiveness. Cancellation is also available for borrowers with total and permanent disabilities. And borrowers who were deceived by their schools or who had their education disrupted by a closure may be eligible for “borrower defense” and closed school discharges. If you think you may be eligible, you can apply for these programs online  or call your servicer.
• You may be able to reduce your monthly payments through income-driven repayment options.  Under income-driven repayment plans, borrowers may reduce their monthly payments to as low as $0. Under its newest income-driven plan, the Department of Education estimates  that more than 1 million additional borrowers will qualify for a $0 payment. Borrowers can enroll in income-driven repayment online or by contacting their loan servicer.
• All borrowers should be automatically protected from certain consequences if they miss payments . The Department of Education has created a temporary “on-ramp” to protect struggling borrowers. If you miss payments, interest will begin to accrue on your loan but should not capitalize, and you should be protected from negative credit reporting, being placed in default, and being referred to collection agencies for late, missed, or partial payments for up to 12 months. However, this safety valve measure should not be used by servicers to delay assisting borrowers with their loans, and consumers should contact CFPB if they have concerns.

If you have questions about the details of any of these programs, visit StudentAid.gov  or contact your loan servicer.