The COVID-19 student loan relief program has seen its share of extensions. The most recent one is set to expire May 1, 2022.
This means that you need to take steps to prepare for student loan payments to resume. Here are a few steps you can take to help you prepare:
1. Get in Touch With Your Loan Servicer
With student loan payments restarting soon, you will need to stay in contact with your loan servicer. There may have been important updates to the terms of student loan repayments — especially after a long payment hiatus.
Performing this step will also allow you to change certain account details you have on your account. In particular, you’ll want to update your contact information and other information like your income if there have been changes to it.
2. Determine the Amount You Need Pay
Besides finding out how much you’ll have to pay once student loan payments restart, you also need to find out when you have to pay. To find this information, you can log into your account on your servicer’s portal or call them.
3. Update Your Repayment Plan
You may have had different circumstances when you selected your repayment plan in the past. Between that time and now, your circumstances may have changed. Whatever the changes in your circumstances are, you need to look at your current repayment plan and make sure it still suits your situation.
4. Consider Ways To Lower Your Future Monthly Payment
If you don’t think you’ll be able to afford your monthly payments you can apply for an Income-Driven repayment (IDR) plan. On an income-driven repayment plan your monthly payments will be capped to a % of your discretionary income which can help make your payments more affordable. If you’re already enrolled in an income-repayment plan but your income has changed you can request a payment recalculation from your student loan servicer.
5. Arrange for Temporary Relief If Necessary
If your estimated payment still seems too high you may be able to temporarily suspend your payment all together by requesting deferment, or forbearance. Getting relief comes with pros and cons and can affect your progress towards certain programs like PSLF. Hence, you need to consult your loan servicer before making this decision.
Student loans payments will resume before you know it so it’s important to prepare now. Are you looking to be better at saving money? Check out our resources to improve your saving skills and financial literacy today.