The Biden administration has announced that it will resume charging interest on federal student loans starting from September 1, 2023, after more than three years of suspension due to the Covid-19 pandemic. Borrowers will also have to start making monthly payments on their loans in October 2023, according to the Education Department.

This decision was part of a bipartisan deal to raise the debt ceiling and prevent a default on the nation’s obligations.

The deal also prevents further extensions of the payment pause, regardless of whether the Supreme Court allows the administration to cancel some debt for millions of borrowers.

The restart of payments and interest will affect more than 40 million Americans who hold federal student loans, and who have saved approximately $5 billion in interest each month during the pause. Borrowers who are struggling to afford their payments can contact their loan servicers to explore options such as income-driven repayment plans or forbearance.