Student loan payments could resume in May — here's how to prepare now
Welp, we’re still in the dark about when student loan payments will resume.
Most recently, we’ve learned that the Department of Education directed federal student-loan lenders to halt sending notices to borrowers about resuming payments, Politico reported.
While this signals that Biden’s administration will delay student debt payments for a fourth time (fingers crossed), the future of loan payments is uncomfortably vague. To prevent any worst-case scenarios from happening, we think it’s best to be prepared for the unknown of these loans.
So, how exactly do you get back on track with your student loan payments after a two-year (and potentially beyond) hiatus? We’ve got some really simple steps that will make getting back on track with payments a little less painful.
Get reacquainted with your loans and balances
First things first: Take the time to log in to your student loan account at studentaid.gov. Student loan borrowers can log in to an existing account using their Federal Student Aid ID username, email or phone number or create an account if they don't have one already.
Once you’re logged in, you can look at your current balances, interest rates and other relevant details. You may not love what you see, but knowing where you stand is the first step to getting back in the swing of things with your student loan payments.
Update your contact info
While you're in your account, you should take the time to confirm or update contact information like your email, mailing address and phone number — all of which could have easily changed during your student loan payment pause.
Updating your contact information can help ensure you get updates on your loans as monthly payments resume. For example, if the Biden administration decides to pause student loan payments for another few months, you’ll want all the details.
Figure out your student loan payment
Next, you'll need to make sure you know what your monthly repayment obligation will be. Fortunately, you might already have some information handy for this part.
Most borrowers have an account with a third-party student loan servicer that handles the day-to-day management of student loans. For example, even though you have federal student loans, these loans are actually administered by servicers like FedLoan Servicing, Great Lakes Educational Loan Services or Nelnet.
If you were making payments on your loans before March 2020, chances are good you already know where to log in to see and make your monthly payments. However, there were some significant changes among federal student loan servicers over the last year, so you may have a new servicer to deal with come May.
If you don't know the name of your student loan servicer, you will likely find it on your studentaid.gov dashboard under “My Loan Servicers.” The U.S. Department of Education also lists the contact information for all federal student loan servicers on its website.
Explore different repayment plans and options
What if you’re not satisfied with your current payment? Say, for instance, you make less — or more! — now than you did two years ago. You can actually take steps to change the amount you pay each month. As it turns out, federal student loans come with many different repayment options that you can adjust as you go, and you can make automatic payments each month if you choose. Some plans will even give you a lower monthly payment when you agree to spread out your repayment timeline (up to 30 years).
If your income is low enough, you may also benefit from exploring income-driven repayment plans like Pay As You Earn (PAYE) and Income-Based Repayment (IBR). Plans that fall in this category let you pay a percentage of your discretionary income (as little as $0 per month) for 20 to 25 years before forgiving any remaining loan balances. Best of all, these programs are based only on your income, so you don't have to work a specific job to qualify. Also, it’s worth remembering that federal loans had student loan relief plans well before these pandemic times we're in. If you're unsure if you can make any payments at all, you can always apply for a regular deferment or forbearance.
Whatever you do, don't wait until May (or whatever deadline gets selected next) to figure out your student loan repayment options if you're struggling with the mere idea of getting re-started. Take steps now to switch payment plans or apply for help, and you'll be in better shape once federal student loan payments are here to stay.
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