The Department of Education will be notifying federal student loan borrowers about the upcoming return to normal payments and interest rates.  Due to the President’s Executive order, payment will now begin on January 1, 2021.

The initial student loan notification program under the CARES Act was planned to start in August.  This has been moved back to November because of the Executive Order.  It is still planned that each borrower will receive at least 6 different notifications about the payment restart between November 1^st through December 31^st. 

Here is a list of the current notification process that will officially start on November 1 or before.  

Types of Notification

The borrower will receive different types of notifications depending on what information is on file for each borrower.  We would recommend that you log into the StudentAid.gov website and verify your email account and cell phone number listed for your account.  You will need your FSA ID to get access to that information.

The most common notification methods will be email, text, and some phone calls.  You should also want to review your loan servicer account information.

Initial Email Notification

The initial email subject notification will state Your Student Loans: Current 0% Interest Is Not Permanent.  The sender will be noreply@studentaid.gov.  You may want to check your SPAM or Junk mail depending on your email privacy settings.

Return to Normalcy

Here are the major items that will begin on January 1 for all federal student loans:

• Federal Loan Interest rates will no longer be 0.
• Federal Loan Interest rates will return to the interest rates that were in effect on March 13.
• Loans will start being charged their stated interest rate depending on the loan type.
• Repayment of student loans will start using the March 13 data unless you made changes during the CARES Act period.
• Recertification of Income-Driven Repayment(IDR) methods will restart.  IDR Recertification during the CARES Act and the executive extension will be compressed from January 1, 2021, to March 31.  You can recertify prior to this date by contacting your federal loan servicer.

Reminder on Private Student Loans

These notifications are only related to your federal student loans.  Some private lenders did offer some incentives during the March 13 to October 1 timeframe.  If you have private loans your method of communication will be different.  It is recommended that you contact them directly and verify which options you have.

Revisiting Your Federal Loan Repayment Options

These next 2 months may be a great time to revisit your student loan repayment plan.  Since no payments are due until January, you have time to evaluate all your repayment options which could improve your financial future. 

PayForED’s Student Loan RePayer provides a trusted second opinion on which loan repayment options may work best for you.  This is especially true for the married couple or the borrower trying to qualify for Public Service Loan Forgiveness.

With interest rates at record lows, revisiting a private student loan refinancing could also be a great option.  Unlike federal loans, private loans could provide a much lower interest rate since they are based on a borrower’s credit score and current interest rates.  Most federal loans carry an interest rate based on the issue date and are not adjusted to current market interest rates when consolidate.