The Student Loan Payment Pause is Ending
Student loan payments are coming back: here's how to prepare for when payments resume
With federal student loan payments set to restart in early September and forgiveness off the table, millions of borrowers find themselves on the brink of a significant shift in their financial obligations. The student loan payment pause, introduced as a much-needed relief during the tumultuous times of the pandemic, has been a financial respite for many. However, the reality is that this pause was temporary and the responsibility of making these payments will soon shift back to the borrowers.
As we approach this critical payment resumption date, it's important for borrowers to prepare themselves for the reintroduction of these monthly payments into their budgets.
These two steps will help you in the process of preparing for your student loan payments restarting:
1. Find your student loan servicer
Your servicer is the company that manages your student loan, provides you with information about your loan, and processes your student loan payments. A lot of servicer changes took place during the pandemic, with up to 65% of borrowers having switched servicers during that time. The ability to accurately navigate your repayment begins with knowing who your servicer is.
2. Set up your student loan payment
With the correct servicer identified, you can now delve into the details of your loan and prepare for the resumption of payments. You should always take into account your own financial circumstances. Consider the following:
Review your loan terms: Understand your student loan's interest rate, principal amount, and type (federal or private). This knowledge will guide your repayment strategies.
Budget for resumed payments: Your monthly budget must now accommodate these resumed payments. This could mean changing your repayment plan, cutting back on non-essential expenses or finding ways to increase your income.
Establish an emergency savings fund: This acts as a financial safety net, helping you manage your loan payments if unexpected expenses or income loss occurs.
The reality of federal student loan payments resuming is an impending truth for millions of borrowers. But with understanding, preparation, and a forward-thinking approach, this transition can be managed effectively, ensuring that your educational investment continues to be a stepping-stone to your future success.
That’s why a Top 5 Bank has partnered with Payitoff to help borrowers find their student loan servicer and set up their monthly payment - potentially saving them thousands in the process. Just click below to give it a try.
