6 Ways to Prepare for Student Loan Repayment to Begin Again
Your monthly student loan payments will begin again after the COVID-19 emergency relief ends on Dec. 31, 2022. Here are six things you can do to prepare—and to make payments more affordable if need be.
Update your contact info.
Get info about your next payment.
Once the payment pause ends, your loan servicer(s) will send you a billing statement or other notice. This notice will include your
- payment due date,
- upcoming interest, and
- payment amount.
Your payment will be due no sooner than 21 days after your servicer sends the billing statement.
To find out your upcoming payment amount, log in to your loan servicer’s website. If your servicer doesn’t provide this info online, you can call or email your servicer.
If you don’t know who your servicer is or how to contact them, follow these steps:
- Visit your dashboard.
- Find the “My Aid” section.
- Select “View loan servicer details.”
If you can’t log in, call us at 1-800-4-FED-AID (1-800-433-3243) for loan servicer info.
|FedLoan Servicing (PHEAA)||myfedloan.org|
|Great Lakes Educational Loan Services, Inc.||mygreatlakes.org|
|Default Resolution Group (also known as Maximus Federal Services, Inc.)||myeddebt.ed.gov|
Enrolled in Auto-Debit?
If you plan to repay your student loans by auto-debit, check to make sure you are enrolled. Watch for news from your loan servicer before your payments start again.
Make sure you’re on the best repayment plan for you.
Your situation may have changed during the COVID-19 emergency. Now is a great time to think about whether you’re on the best repayment plan for you.
Even if you change your repayment plan now, you can always change your plan again later.
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.
Take action if you want to lower your monthly payment.
After understanding all your repayment options, you may choose to apply for a specific plan. Or you can ask to be placed on the plan that results in the lowest monthly payment amount.
Are you already on an IDR plan, but your income changed recently? You can update (recertify) your info to see if you can get a new, lower payment amount. Recertify by following these steps.
Consolidating your federal student loans may also lower your monthly payments. However, you should consider the pros and cons of consolidation to decide if consolidation is right for you.
As a last resort, contact your loan servicer to ask for short-term relief.
If you can’t find a repayment plan that works for you right now, you can request to temporarily pause or lower your payments through short-term relief (deferment or forbearance). Before you make a request, use Loan Simulator to learn how this short-term relief affects your loans and loan payments. Then contact your loan servicer to request a deferment or forbearance.
Remember, a normal deferment or forbearance is different from the COVID-19 emergency payment pause. Interest can still accrue (add up) during deferment or forbearance. Deferment and forbearance also affect loan forgiveness options, such as Public Service Loan Forgiveness or IDR plan forgiveness.
Understand what happens if you don’t repay your loan.
If you miss a payment, your loan becomes delinquent.
If your loan is delinquent for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus. Delinquency will affect your credit score, making it harder to get credit.
After 270 days, your delinquent loan goes into default. When you default on a loan, here’s what happens:
- You can lose your access to more student aid.
- The default status will damage your credit score.
- The government can take
- your tax refund,
- part of your Social Security benefits, or
- up to 15% of your paycheck
to pay off your defaulted loan.