Monetary loan

How to prepare for the restart of student loan payments

Federal student loan borrowers should prepare to start making payments again. The current suspension of federal student loan repayments has been extended until May 1. It is possible that the pandemic-inspired suspension, in place since the start of 2020, will be extended. The government could also write off some student loan debt entirely, as some supporters are calling for. But, in the meantime, borrowers need a game plan.

Here are some answers to questions about what to do.

Q. What can I do now to prepare?

A. Get organized. Update your contact information with your loan officer and on Review your repayment plan options using the Federal Student Loan Calculator tool at to see if you might be better off with a different plan, such as an income-driven repayment plan, where payments are tied to your income and family size.

Some borrowers may need to take additional steps, such as finding a better paying job, taking on additional work, selling belongings, finding cheaper housing, or borrowing from family or friends. a november to study from and found that three in five borrowers who earn at least $100,000 a year will need to take extra steps to pay off their student debt. That figure jumps to 71% for those earning between $50,000 and $99,999 a year, and 72% for those earning less than that.

Q. Will direct debit payments resume?

A. For most borrowers who were making automatic loan payments from a checking account, these payments will not restart automatically. You will need to register again, according to Federal Student Aid. Check your direct debit enrollment or sign up for this service before payments resume.

Q. Will my monthly payment stay the same?

A. Many borrowers will have the same interest rate, but that may not be the case if, for example, you consolidated your loans during the break, according to Federal Student Aid. Contact your repairer for more details on your rate.


How are you preparing for the resumption of student loan repayments? Join the conversation below.

Q. What if my monthly payment is still too high?

A. You may be able to lower your monthly payment by switching to an income-driven repayment plan. If you are not eligible for one of these plans, speak to your servicer to see what other options exist.

Q. What happens if I have loans in default?

A. For covered loans in default, collection activities are not expected to resume until after May 1, according to the National Consumer Law Center’s Student Loan Borrower Assistance Project, a resource for borrowers, families, and advocates for student loan borrowers. So until then (or if the break is extended) you shouldn’t receive any collection calls, emails or texts, and you shouldn’t have any garnished wages or money taken from your reimbursements. taxes or your social security benefits. To improve the chances that a tax refund, if any, will be paid before the Department of Education can resume garnishing tax refunds, defaulting borrowers could consider filing their taxes sooner, according to the Student Loan Borrower Assistance Project.

Q. What other options might borrowers consider?

A. Job seekers and current workers should ask employers about student loan repayment programs available through the company or organization, says Stacey MacPhetres, senior director of finance at education at Bright Horizons, which provides employers with tuition and student loan assistance. The Goodly Jobs Board, available at, allows job seekers to browse job postings from thousands of companies that offer student loans. Employers can contribute up to $5,250 per employee per year toward eligible education expenses, such as student loan assistance, without increasing the employee’s gross taxable income.

Ms. Winokur Munk is a writer in West Orange, NJ. She can be contacted at [email protected]

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