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Federal student loan payments resume in 2022 — here are 10 tips for easing back into payments

Here's what you can do now to set yourself up to start tackling your loan payments again.


The Mint app has shut down as of Jan. 1, 2024. For alternatives, check out CNBC Select's ranking of the best budgeting apps.

Federal student loan payments, which have been on pause since March 2020, are set to resume after Jan. 31, 2022.

Many borrowers have grown accustomed to having more money in their budgets since they haven't had to make monthly student loan payments for over a year and a half. With these payments resuming, some borrowers may have to readjust their spending and saving in order to afford this additional bill. And in some cases, that may be easier said than done.

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Select spoke with Mary Jo Lambert-Terry, a managing partner at Yrefy, a lender that specializes in private student loans, to get some tips on how to prepare to restart your student loan payments. Here are 10 steps you can take to set yourself up for success:

1. Make sure you know who your loan servicer is

Over the past few months, some federal student loan servicers have opted to not renew their contracts with the U.S. Department of Education to manage loan payments. This could mean you won't be sending your monthly payments to the same agency that you did before the pandemic. Instead, you will be reassigned to a new loan servicer and it's important to know who that is.

"The first thing borrowers should look into is who their loan servicer currently is," says Lambert-Terry. "This info can be found on studentaid.gov. This piece is key, because it's always good to reacquaint yourself with who you should send payments to and what the payment amount is."  

If your servicer has changed, you should be receiving a letter in the mail regarding the switch.

2. Update your address if needed

Many people moved at some point during the pandemic and will need to make sure their loan servicer has their most up-to-date mailing information., so you get your monthly bills and other communications.

If you need to update your address, you can go to the studentaid.gov website, click on your profile and update your personal information with your new address and phone number, says Lambert-Terry. Alternatively, you can go directly to your loan servicer's website and update your information there.

3. Double check the minimum amount you're required to pay

"You want to make sure that you're setting yourself for success, so you'll need to know how much of a minimum monthly payment you had prior to the pandemic, and how it fits into your lifestyle right now," Lambert-Terry says. "Reacquainting yourself with how much you need to pay can help you figure out if it's still in your budget and what your other options may be if it isn't."

If your situation has changed, and the required minimum payment is a bit too high, one option to consider is enrolling in an income-driven repayment plan. With this payment plan, your required minimum payment is dependent on how much money you've earned that month, so you can avoid being on the hook for an amount that may break your budget.

4. Take a look at your budget to make sure you can afford the payments

For many borrowers, the pause on payments has changed the way they spend and save money. Some people may have been able to pad their savings with the money they would have otherwise put toward their debt. Others may have found it more manageable to move out or upgrade to a different living space with the extra room in their budgets.

Some of the lifestyle changes you made during the pandemic may affect how much you can comfortably afford to start paying toward your debt. So it's a good idea to take a look at what your spending has been like over the last few months to figure out how much of a monthly student loan payment can fit into your financial plan.

This can be as simple as going through bank statements and jotting down your highest spending categories, or letting a budgeting app like Mint or Empower do the leg work for you. Once you connect your bank account, credit cards and student loan account to the apps, they'll track your spending, saving and debt payments all in one place.

5. Update your enrollment in automatic payments.

Prior to the pandemic, it might have been easier to just set up autopay for your student loan debt so you wouldn't have to think about manually sending payments each month. But there are some circumstances where automatic monthly payments may no longer suit you.

For example, maybe you previously had a steady paycheck each month so you were able to automatically pay the same amount every time — but now, your income varies from month to month, and the amount you can afford to pay toward your loans will be different each time. Or maybe you can no longer afford your monthly payments at all. In these cases, it's crucial to remember to remove yourself from your autopay settings so payments you can't afford aren't taken out of your account.

If you turned autopay off while loans were on hold and can afford your payments, you should remember to turn this setting back on so you don't accidentally miss your first payment.

6. Reach out to your loan servicer if you're unable to make payments

"Reach out to your servicer and have that conversation [now], so you know what your options are," Lambert-Terry says. "If, for example, you're currently unemployed, one option you may have is unemployment deferment. This lets you postpone your loan payments for up to another 36 months."

7. Make any necessary adjustments to the repayment plan you're enrolled in

"There are different types of repayment plans, and there are options for each of those when it comes to getting you into a payment program you can actually afford," Lambert-Terry says.

The first plan is a standard repayment plan, where your payments are broken up into fixed, even monthly amounts until the loan is paid off in about 10 years.

The second plan is a graduated repayment plan. With this option, your monthly payments start off low and gradually increase approximately every two years to help you pay off your loan within about 10 years.

The third plan is an extended repayment plan, which gives you the option to make fixed or graduated payments over the course of 25 years instead of 10 (keep in mind, though, that to qualify for this plan you'll need to have a loan balance of more than $30,000).

The studentaid.gov website outlines five additional repayment plans, which you can refer to when speaking to your loan servicer about which option may be best for you.

8. Consider federal consolidation programs if needed

"If you have multiple loans and want to get it down to one single payment, there are federal consolidation programs available," she says. "So if you have graduate loans and undergraduate loans, you can do a consolidation federally, and it will lower your monthly payment and extend your term, and you won't have a prepayment fee for paying off the loan early."

9. Consider refinancing your federal loans for a lower interest rate

Once payments resume, the interest rate you paid on your loans prior to the pandemic will be the interest rate you continue to pay. For some people, high interest charges can make it difficult to feel like they're making progress toward paying down their balance.

Refinancing allows you to swap your current loan for a new loan with a lower interest rate. Companies like SoFi and Earnest have options for those who are interested in refinancing their loans.

While your monthly payments might be lower, when you refinance, your federal student loan becomes a private loan, and you won't be entitled to any of the same protections you get with federal student loans. For example, federal borrowing allows you to request payment pause periods for a multitude of circumstances, including beginning graduate school and being unemployed; with private loans, though, you must continue making payments under these circumstances.

10. Don't ignore your upcoming payment date

One of the worst things you could do when federal student loan payments resume is to take on a passive role in the process. You want to make sure you're receiving accurate, updated information about where to send your payments and how much you'll need to pay each month. And you also don't want to wait until the very last minute to let your servicer know that you'd be unable to make your payments in full each month.

"Be proactive and take a look at what your options are right now," Lambert-Terry cautions. "We encourage people to look at this right now because the closer to January 31, 2022 we get, the busier servicers will be."

Catch up on Select's in-depth coverage of personal financetech and toolswellness and more, and follow us on FacebookInstagram and Twitter to stay up to date.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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