Preparing for federal student loan repayments to kick in

Follow these six steps as the repayment pause draws to a close

By now, you probably know the federal student loan payment suspension that aimed to bring financial relief to borrowers during the worst of the COVID-19 pandemic was extended until May 2022. The latest three-month reprieve likely marks the end of the freeze that began in March 2020.

Right now, some 46 million Americans have student loan debt, with the vast majority – 45.4 million U.S. residents – with federal student loan debt which totals $1.75 trillion and grows six times faster than the nation’s economy, according to the Education Data Initiative.
There are several key things those holding outstanding student loans should do as the payment pause draws to a close.

Save the date

It’s been nearly two years since most regular student loan payments were required. Go ahead and mark May 1 on your calendar, whether it’s a paper day planner or the electronic one attached to your email. Better yet, do both. Post a sticky note on the fridge if that helps you remember.

Watch for notifications

Be on the lookout for a notice from the company that services your loan. They should notify you at least 21 days before your next payment is due about the details of your new payment schedule. As the date draws closer and you haven’t heard from the loan servicer, it’s a good idea to contact them directly to make sure you know the exact details of your new payment plan.

Update your contact info

It’s also a good idea to visit and make sure your contact information, including your address and phone number, is up-to-date. Same goes for your loan servicer. Now is also a good time to review your auto-debit enrollment or sign up for the first time. To do that, log in to your loan servicer’s website or contact them directly.

Assess your situation

Millions of people have lost jobs and other income sources during the pandemic. If you haven’t taken a look at your finances to figure out if you will be able to make regular payments, now is the time. If you can swing it, go ahead and set some money aside now to help ease the stress when payments resume.

Consider income-driven repayments

If you don’t think you will be able to make the student loan payments in full beginning in May, look into an income-driven repayment (IDR) plan that will tie the amount you are required to pay each month to your income and family size. There’s an online calculator at where you can run the numbers to get a sense of what your payments under an IDR would be. If you already have an income-based repayment plan and your situation has changed (i.e. you have gotten married), you can request that the amount be recalculated.

Be wary of student loan assistance offers

The U.S. Department of Education also reminds borrowers that they aren’t required to pay to receive help with loan services such as consolidating federal student loans or applying for income-driven repayment plans. These services are provided free of charge by the government and those they contract with to service federal student loans.
If someone asks you to pay for enrollment, subscription or maintenance fees involving your federal loan repayment plan, end the communication. It’s probably a scam.

With reporting by Casandra Andrews

Jean Chatzky

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