Federal student loan payments have been on the back burner for over three years. But the yearslong break officially ends at the end of this month. And this time, pandemic-related extensions are no longer an option, so you'll have to make room in your budget for a student loan bill.
If you haven't been keeping up with the latest student loan news or are unsure about what you need to prioritize, here are two things to keep your eyes on.
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Your loan servicer may have changed
You're probably aware that student loan payments resume in October, but you may not be entirely sure who you need to pay. And there's a good reason for that.
Many loan servicers that managed student loan debt for the government no longer handle it, so your loans may have been transferred to a new servicer. For example, Aidvantage has taken over some student loans that were previously serviced by Navient.
If you find yourself in this situation, you should have received a letter or email informing you of these changes. This communication should include:
- Notification that your student loan has been transferred to a different federal loan servicer
- The name of your new loan servicer
- Contact information for your new loan servicer in case you have any questions
If you happened to miss this notification, don't worry too much. You can log into your student loan account at studentaid.gov and access your dashboard to view all the details of your loans.
Your first payment will be due soon
Interest on federal student loans kicks in on Sept. 1. The government had reduced interest rates to 0% during the student loan freeze, so your rates will return to the original levels in a few days. However, you'll still have a few weeks before your first payment is due.
Come October, millions of people will have to start shelling out money toward their monthly student loan bill for the first time since March 2020. The exact deadline for your first payment is a little fuzzy because it depends on your personal circumstances and your loan servicer. But you should receive a heads-up at least 21 days before your payment is expected.
In the meantime, here are some action items you can check off your list:
- Create a budget so you can make room for payments
- Look into an income-driven repayment plan, if needed.
- Make sure your loan servicer has your current information.
At the very least, take a look at how much money is flowing into your pocket every month and how much you're spending. If it seems impossible to squeeze student loan bills into your budget, you'll want to jump on other options as soon as possible to make your bills more affordable. If you need a repayment plan, you can use the loan simulator on the federal student aid website to see what plan makes sense for you.
The student loan clock is ticking
With all the updates that have been released over the last three years, it can be a challenge trying to keep track of everything. Getting a head start on your to-do list will reduce the risk of having to cram everything in at once. As long as you know who you have to pay and how much you have to pay, you're on the right track to start chipping away at your student loan debt.
