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Making Student Loan Payments Again

In March of 2020 student loan payments were put on federal pause and have gone through a number of extensions to its final extension through September 2023. The Department of Education announced this on August 6th. This gives student borrowers several months to prepare to make payments again.

According to a survey by financial advice website Finder, 22% of student loan borrowers said they would be unable to pay when payments resumed, and another 39% said they would have to cut back to make payments.

If you have federal loans and believe you will face financial hardship, you should reach out to your servicer now. Being prepared will set you ahead. If you know you will have difficulty repaying debt, proactive communication with your loan servicer is crucial. Consider inquiring about Income-Driven Repayment (IDR) plans, which adjust payments according to your income and extend the repayment term. If your income has changed since you were last enrolled in an IDR plan, it's vital to recertify your income.

If you can still make payments on your federal loans, use this time to prioritize your financial goals. Directing payments towards your federal loans can reduce the overall debt. Payments will first cover any accrued interest before reducing the principal. Alternatively, focusing on other debts, like credit card balances, or building an emergency fund are equally sound financial decisions.

If your federal loans were in default before forbearance, all collection activities have been suspended. Wage garnishment and collection calls have also been extended with payment forbearance. Make sure to talk to your servicer to get all the information. Engaging with your loan servicer to discuss exit strategies from default is advisable.

If you’re pursuing Public Service Loan Forgiveness, all months of non-payment will still count toward the 120-payment requirement needed to qualify for PSLF as long as you are continuing to work full-time for an eligible organization.

If you recently graduated from college, your first payment won’t be due until repayment begins. If your six-month grace period overlaps with the automatic forbearance, your interest will not grow. This is contrary to a normal cohort year. Discover who your servicer is and determine what your first payment will look like.

If you are taking time off from school, and you last attended school in the spring, your payments would have started to come due this fall. Extended forbearance period would delay your first payment until the extension ends. If you resume classes, you can defer payments until you finish school as long as you are enrolled at least half time.

If you have private student loans, your lender may offer private student loan relief. This could be I the form of reduced or paused payments. Best decision is to contact your lender and as about any deferments or payment reductions. This may be tricky as private lenders are not required to offer any assistance but may be worth the discussion.

If you have non-government owned FFEL or Perkins loans, you do not have access to the automatic forbearance. You can take advantage of the forbearance if you decide to combine your loans into a federal direct consolidation loan. Consolidating loan will cause your unpaid interest to capitalize or be added to the principal balance. Contact your servicer to understand how consolidation will affect the total repayment amount, intertest and balance.

Understanding student loans is complex, but luckily, we are experts! PTI offers a range of options to help reduce your organizations CDR. For more information call (402) 899-8143 or email


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