Everything You Need to Know About the Student Loan Payment Unpause

How did this happen? The government has recently been in negotiations over raising the debt ceiling, and agreed to pass the Fiscal Responsibility Act (the debt ceiling bill), eliminating the possibility of further pauses on student loan payments.  From understanding the new legislation to taking proactive steps, we've got you covered. Let’s dive in.

Key Dates to Note

June 30th, 2023: Deadline for Supreme Court to decide whether to pass Student Loan Forgiveness

August 29th, 2023: Student loan payments were originally scheduled to resume.

September 1, 2023: Interest will be unpaused on loans, but payments will not yet be required

October 2023: Student loan payments will begin again

What about Student Loan Forgiveness?

Just because student loan payments are starting again, doesn’t mean that President Biden's student debt forgiveness plan is yet cancelled. The Supreme Court is set to make a decision on whether to allow student loan forgiveness to go through by June 30, 2023. So, while future payment pauses are off the table, the potential for debt relief is still on the horizon.

How do I prepare?

1. Locate your student loan servicer

Figuring out who your servicer is will help you login to your payment portal, see how much you owe, and how much interest you have accrued. However, since the start of the pause, the company managing your student loans may have changed. To find your servicer, log into StudntAid.gov and scroll to the “My Loan Servicers” section (big servicers include Nelnet, Mohela, and others). Make sure to then go set up an account with the servicer if you don’t already have one, as this is where you will make your payments.

2. Make a budget

Take a look into your current budget and start thinking about how to make room for the new monthly payments coming your way. It might even make sense to get in the habit of setting aside the cash now, especially since interest will start accruing again in September. Set aside the equivalent of what you would pay towards your student loans and utilize these funds to build up your emergency fund. This way, in case student loan forgiveness remains goes through, you’ll have some extra cash. In addition, if you had automatic payments set up on your student loans before the pause, try to reinstate them if you can.

3. Contact your servicer:

If you look at your budget and realize you may have a hard time making your payments, contact your servicer over email or phone. Update your contact information and ask about any available payment plans and how to reduce your estimated monthly bills. Servicers are anticipating a surge in customer service inquiries, so it's best to get ahead of the crowd.‍

4. Consider an income-driven repayment plan (IDR):

Speak with your servicer about signing up for an IDR plan. These plans adjust your monthly payments based on your disposable income, potentially lowering them to as low as $0 per month. Complete the necessary paperwork now to ensure you're enrolled in an IDR plan when the pause ends.

5. Get organized

In case student loan forgiveness goes through, make sure to have all your paperwork handy so you can take advantage. Either way, it’s best to make a plan before the pause ends - it's time to face the music. Stay informed, explore your options, and don't hesitate to reach out for guidance. It might be a rocky road, but you've got this!

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