Student Loan Payments Restart Next Year — Key Dates & How to Prepare

 

After years of emergency relief, federal student loan policies are shifting again in 2025. If you have federal student loans or may in the future, it’s crucial to know when payments resume, what changes are coming, and how to prepare. This guide walks you through the updated timeline, key rule changes, and actionable steps to ensure you aren’t caught off guard.

📅 What’s Changing & When

May 5, 2025 — Collections on Defaulted Loans Resume

On May 5, the U.S. Department of Education resumed involuntary collections for federal student loans in default. Economic Policy Institute+3U.S. Department of Education+3WUSF+3

·         This means wage garnishment, tax refund offsets, and other collection actions may restart. WUSF+3The Guardian+3U.S. Department of Education+3

·         Borrowers in default were notified and offered options like loan rehabilitation, enrolling in an income-driven repayment (IDR) plan, or making payments to bring the loan current. U.S. Department of Education+2Consumer Financial Services Law Monitor+2

If your loan was not in default, this change may not affect you directly — but be cautious, as missed payments going forward could push you toward default status.

August 1, 2025 — Interest Resumes for SAVE Plan Borrowers

If you’re enrolled in the SAVE (Saving on a Valuable Education) plan, interest accrual will restart on August 1, 2025. U.S. Department of Education+2WBAL+2

·         The SAVE plan had paused interest under certain conditions, but a court injunction led to a rollback of that provision. U.S. Department of Education

·         That means your loan balance may begin growing again due to interest, even before principal payments resume. U.S. Department of Education

·         SAV E borrowers are being urged to switch to a legally compliant repayment plan (e.g. Income-Based Repayment (IBR)) so they can accrue qualifying payments. U.S. Department of Education+1

“No Earlier Than” December 2025 — First Full Payment Scheduled

According to current guidance, servicers expect that the first required monthly payments for many borrowers will begin December 2025, although the timeline depends on system updates and legal developments. Forbes

·         Technical changes are underway across federal servicers to re-enable payment processing. Forbes

·         That said, this timeline may shift depending on new rules, court decisions, or administrative delays. Forbes+1

Other Important Dates to Watch

·         April 2025: The Department of Education completed its payment count adjustment—this restored accurate credit for qualifying payments made under Income-Driven Repayment (IDR) plans. Federal Student Aid

·         July 1, 2026: New repayment plans and caps on graduate loans are scheduled to take effect under recent legislation, including replacement of older IDR plans. WBAL

·         Recertification Deadlines: If you’re in an IDR plan, failure to recertify (submit income/household info) by Feb 20, 2025, led to servicers temporarily recalculating payments. Federal Student Aid

🧭 How These Changes Affect Different Borrowers

Scenario	Impact	Action Needed
Defaulted borrowers	Subject to collections via wage garnishment, tax refund intercepts, and offsets	Get out of default via rehabilitation, consolidation, or repayment
SAVE plan enrollees	Balance may grow due to interest; payments may not count toward forgiveness unless switched	Move to legal IDR plan like IBR; use loan simulator
Borrowers in other IDR plans	May see restored payment counts or new rules under the future system	Monitor changes; maintain recertification
Non-default borrowers	Avoiding payments or partial payments may lead to default status	Prepare to resume payments by late 2025

 

✅ Steps You Can Take to Prepare Now

1.      Check Your Loan Status
Log into StudentAid.gov and review your loan portfolio, repayment plan, and default status.

2.      Recertify Your IDR Plan (or do so early)
Ensure your IDR plan (IBR, PAYE, etc.) is active and your income is up to date. Missed recertification can raise your payments. Federal Student Aid+1

3.      Switch Out of SAVE If Necessary
If you’re on SAVE, consider moving to a legally compliant IDR plan so your payments count toward forgiveness and your balance doesn’t balloon. U.S. Department of Education+1

4.      Use Loan Simulator Tools
Estimate what your monthly payments will be under different repayment plans and understand the tradeoffs. The Department of Education offers tools for that. U.S. Department of Education+1

5.      Budget & Save Ahead
Begin setting aside funds now to ease the transition when payments resume—especially if your income is tight.

6.      Stay Informed on Rule Changes & Legislation
Watch for notices from the Department of Education about final rules, new repayment plans (e.g. RAP scheduled for July 1, 2026) and how they affect your choices. WBAL

7.      Communicate with Your Servicer
Reach out proactively. Your servicer can explain options like switching plans, holding your default off, or other relief programs.

⚠️ Key Risks & Considerations

·         Interest accrual will increase your balance once interest restarts under SAVE.

·         Failure to recertify or resume payments could push you into default and collections.

·         New rules may change eligibility for forgiveness or repayment benefits, especially for SAVE participants or employees of certain employers. TICAS

·         Tax implications: forgiven balances may become taxable if relief expires (e.g., some forgiveness was tax-exempt through 2025). Forbes

🏁 Final Thoughts

The return of student loan payment obligations in 2025 marks a major shift. While the timeline is still evolving—servicers anticipate first payments no earlier than December—some changes are already in motion (e.g., interest restarting for SAVE borrowers, collections on defaulted loans as of May).

If you have federal student loans, especially under SAVE or any IDR plan, now is the time to act. Verify your loan status, recertify your repayment plan, consider switching plans if necessary, and begin financial planning for upcoming payments. Being proactive will help you avoid default, preserve credit health, and navigate the transition more smoothly.