Ways to Prepare for Student Loan Payments to Resume

Student loan payments on most federal student loans are scheduled to resume on October 1, 2023. However, borrowers may have different start dates depending on when their payments will be scheduled. This is why it’s important for you to review your loans and know the exact starting dates. With the recent debt ceiling deal, it was agreed that the student loan payment moratorium would not be extended again. The administration is providing a 12-month “onramp” period to allow borrowers the chance to begin repayment while avoiding loan delinquencies or defaults. As a result, interest started accruing again on federal loans earlier this month on September 1, 2023. 

It would benefit many to begin making regular payments in October if they’re able. Borrowers can prepare by reviewing their budget, cutting unnecessary costs, and looking into additional relief options that help towards forgiveness. Depending on your financial situation, there may be several ways you can approach paying your student loans. 

Here are some tips the Department of Education recommends you start thinking about to help with the preparation for student loan payments starting up again.

Update Contact Information 

Make sure your contact information is up to date in your StudentAid.gov profile. Having the wrong contact information listed could make you miss updates. It’s important to check that provided proof of income matches the accurate loans. If you need help accessing your account, there are helpful resources that guide you with managing your account.

Know Which Repayment Plan is Best for You

Changing your repayment plan may also reduce how much you pay each month. The U.S. Department of Education offers a variety of repayment plans. For example, an income-driven repayment (IDR) plan is based on how much money you make. Under an IDR plan, payments may be as low as $0 per month. The Saving on a Valuable Education (SAVE) Plan, calculates your monthly payment amount based on your income and family size. The SAVE Plan provides the lowest monthly payments of any IDR plan available. 

Review Your Budget

Once you’re clear on your monthly payment amount, you’ll want to review your budget to see if it can cover your student loan payment. 

A working budget makes room for the following:

• Necessities: Your housing payment, utilities, phone bill, student loan payment, and other essential bills
• Wants: Shopping, eating out, and other discretionary purchases
• Financial goals: Retirement contributions, emergency funds, and money you set aside each month for long- and short-term goals

Enroll in Auto Pay

Enroll in autopay on your loan servicer’s website, which will ensure your payment is automatically processed every month so you don’t miss a payment. Autopay is optional, but if you choose auto-pay, you’ll save 0.25% on your interest rate. Enrolling in autopay can save you money while also ensuring on-time payments, which can help boost your credit score. The key thing is to do what’s best for you.

Now is the time to get your student loans sorted and make a plan for success! We encourage borrowers to check whether or not they will automatically be in deferment or repayment status. Some may unknowingly be in deferment when payments resume and could end up unnecessarily using up their available deferment.Interested borrowers can sign up for the SAVE/REPAYE plan by visiting StudentAid.gov/IDR or schedule a complimentary consultation with our highly skilled counselors to learn more.