Prepare to Start Paying Student Loans October 1st

Following the Debt Ceiling bill earlier this year, the student loan emergency forbearance will end soon and borrowers will need to start repayment again. For many, it’s been more than three years since their last payment, and a lot has changed, so it’s a good idea to start preparing sooner rather than later. This isn’t the first time that we’ve been told the forbearance will end—all to have it extended and extended and extended—with congressional intervention, you can be assured it’s for real this time.

How You Can Be Ready to Resume Repayment

If you haven’t touched your student loans since March, 2020, don’t worry: you’re in the same boat as—quite literally—millions of other borrowers. To get yourself ready for repayment, here are some ways you can get ahead of the curve: 

• Make sure you’ve saved copies of all recent correspondence regarding your IDR plan, especially if you’ve been assigned a new servicer since 2020.
  • If you didn’t save your correspondence from FedLoan before they left the federal student loan scene, there’s no way to recover it now.
• Download and save your employment certification, if you’re pursuing PSLF. 
  • Find your tracker letter with your qualifying payment chart.
• Make sure your contact and banking information are current on your servicer’s website. Outdated information could create delays in communication
• Double-check your auto-debit information to make sure it’s still accurate, or get it set up if you haven’t already.
• If your income has decreased since your last income recertification, consider recertifying before October, so you can potentially reduce your monthly payment.

Prepare for Missing the Income Going to Student Loans

Many of us put our student loan savings over the last three years to good use, purchasing homes, cars, and paying down credit card debt. That boost in savings is soon to end, however, and borrowers need to be prepared. Whether your payment will be $250 or $2,500, it will impact how much you can afford to spend on both daily expenditures and major investments. Consider setting money aside in the coming weeks to prepare you for those loan payments come October. You could even do it gradually: if your payment is $2,500/mo., put $1000 aside in August, then put $2,000 aside in September, and so on. When your payment comes due, you’ve eased into the idea of not having that money to spend on other things, and you’ve already got some extra cash in hand.