Federal student loan payments have resumed after a three-year-long payment pause. Payments were initially suspended in March 2020 due to the hardship many were experiencing because of COVID-19. After numerous extensions, student loan interest resumed on September 1, 2023, and payments restarted on October 1, 2023.
If you’re worried about how this will affect your finances, you’re not alone. Over 40 million Americans have federal student loan debt. We’re here to help you understand what this means for borrowers and how you can better manage your finances as student loan payments resume.
Review Your Loan Details & Contact Information
First, log into your student loan servicer’s account to review your loan details and verify your contact information is up to date. Your lender will notify you before your payments resume, so it’s essential to ensure your contact information – including your email address, mailing address, and phone number – is current.
Not sure who your current servicer is? Visit your Federal Student Aid dashboard and log in to view your loan details. You can also call the Federal Student Aid Information Center at 1-800-433-3243. Keep in mind that lenders changed for millions of borrowers during the payment pause, so your servicer may be different. Double-check your loan provider before making any payments.
Look for Information About Your Payments
Keep an eye out for correspondence regarding exactly when your payments will restart. While payments were slated to have resumed as of October, not all borrowers will make their payments at the same time. Many factors will affect when your first resumed payment is due. Your loan servicer will communicate these details to you at least 21 days before your first scheduled date. The information from your lender will also include your payment amount, due date, interest, number of remaining payments, and projected payoff date.
Prepare Your Finances for Repayment
Once you’ve received the payment information from your loan servicer, you can rework your budget to fit your resumed student loan payments. If your budget is stretched thin after accounting for your student loans, look at your expenses to see where you can reduce spending.
Start with common savings strategies like canceling unused subscriptions. Then, review your other outstanding loans. Loan payments typically make up your largest monthly expenses but also provide the greatest opportunity for savings. If another lender has financed your vehicle, switching it to the credit union could help you secure lower monthly payments. This will free up extra funds for your student loans.
Lastly, consider enrolling in automatic payments for your student loans. You want to ensure you don’t forget to make a payment or hurt your credit score by being late.
Consider Student Loan Consolidation or Refinancing
If your payments are too high and you are worried about being able to make them, consider refinancing or consolidating your loan. Refinancing can help you secure a lower interest rate and reduce your monthly payment. It can also help you pay back your loan faster and save more on interest over the life of your loan. If you have more than one student loan, consolidating them into a single loan can simplify your monthly payments and limit how much you pay in interest.
Unfortunately, many scammers are lying in wait to take advantage of unsuspecting borrowers during times like these. Carefully review all communications you receive regarding your student loan payments to safeguard yourself against scams. Do not provide any personal information via phone or email unless you are positive you are communicating with your loan servicer. The same also goes for promises of student loan forgiveness. If anything sounds too good to be true, it probably is.
We’re Here to Help!
For the latest updates on student loan repayments, visit the Federal Student Aid website. These guidelines apply only to federal student loans, not private student loans. You can access your loan information via your loan servicer’s website.
If student loan payments are stretching your budget thin, we’re here to help. Opportunities like refinancing other loans or consolidating high-interest debt can free up additional funds. To explore these solutions, please stop by any of our convenient branch locations or call 1-800-531-8456 today.
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Each individual’s financial situation is unique. We encourage you to contact United Texas Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.