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4 Things to Do Before Federal Student Loan Payments Restart

June 30, 2023

The COVID-19 emergency relief for certain federal student loans suspended required payments and reduced the interest rate on student loans held by the federal government to 0.00%. This relief has ended, and student loan interest accrual resumes September 1, 2023, with payments due starting in October 2023.

When your student loan payments resume — at your pre-COVID-19 interest rates — these four easy steps can help you make the best of repaying your student loans.

Understand the different kinds of student loans that qualify for COVID-19 assistance.

You may have a mix of federal and private student loans. It's important to understand that not all student loans were eligible for COVID-19 assistance.

Federal Student Loans

If you attended college classes in 2010 or later and took out federal loans, your federal student loans are part of the William D. Ford Federal Direct Loan Program. These loans, and a small number of other loans held by the federal government, automatically received COVID-19 emergency relief benefits from the government. This was initially granted in the spring of 2020. The biggest benefits for these loans were the automatic reduction of interest rates to 0.00% and suspension of required federal student loan payments during the assistance period. (Visit the Federal Student Aid site to learn about the status of the Student Loan Debt Relief program.)

If you attended college before 2010 using federal loans, you may have Direct Loans or non-government-owned federal loans in the Federal Family Education Loan Program. Most non-government-owned FFEL program loans did not qualify for COVID-19 emergency relief benefits, but your lender or servicer may have provided the option to place your student loans on forbearance to postpone payments temporarily if you were financially impacted by COVID-19.

Private Student Loans

Private student loans are offered by student loan lenders as well as banks and credit unions. These loans did not qualify for any federal student loan assistance, but many lenders have offered forbearance or other assistance options due to COVID-19 to assist their borrowers. Those benefits could have been extended or ended by now. Keep in contact with your loan servicer to know when you will need to start making private student loan payments again if you're not doing so currently.

If you suspended your payments using some assistance like a forbearance for private student loans or non-government-owned federal loans, you will be responsible for any interest that accrued during that time. If you haven’t started repayment on these loans yet, find out if you can pay down any outstanding interest before repayment begins to reduce your overall costs.

Confirm the servicer for your loans.

Your federal student loan servicer may have changed since you last made student loan payments.

A number of large student loan servicers for the federal government have terminated their contracts during the past year. Watch for any notifications that your loan servicer has or is changing. You can also verify the information about federal student loan servicers on the Federal Student Aid website.

Need additional help finding out who your loan servicer is? Check out the Know Your Student Loan Servicer article.

Because student loans can be confusing and are a popular news item, scammers try to target student loan borrowers. Always be wary of people or companies offering payment assistance for a fee. Your lender or servicer will not charge you for assistance or information.

Check the current rates and other details.

Use the information about your type of loan and your servicer to learn more about your student loans. It can be useful to make a list with the following information about each loan you have. Our student loan worksheet (PDF) can help you start building your list.

  • Federal or private (If you have federal loans, identify if they are owned by the government or a private lender.)
  • Are you currently making payments? (If not, when are they expected to begin?)
  • Current balance (Principal and outstanding interest may be listed separately.)
  • Remaining term (This may be presented as an anticipated last payment date or estimated number of remaining months in repayment.)
  • Interest rate (fixed or variable)
  • Monthly payment amount (and expected future increases or changes if you're on a special repayment plan like a graduated plan or Income-Based Repayment Plan)
  • Servicer contact information

Collecting this information will give you an idea of where you stand financially and how much you can expect to pay each month when student loan payments resume. Do those loan payments and details make sense for your current financial situation?

Weigh your student loan repayment options.

You should start receiving billing statements before your next student loan payment is due, usually 20-30 days before repayment resumes. If you have another type of assistance that will continue to delay required payments, you may not receive a statement until that assistance ends. If you were making automatic payments, be sure to double-check that those arrangements are still in place. If you pay by mail, keep in mind that the U.S. Postal Service has announced slower delivery times so you will want to make sure you put your payment in the mail a bit earlier than usual so that your servicer receives your payment on time.

If you're still struggling financially due to COVID-19's lingering impact on your health or job, contact your servicers or lenders as soon as possible and find out what assistance options remain available to you. Stay in contact with your student loan servicers to keep your account current, whether through assistance or different repayment options. Most private student loan lenders and servicers offer alternatives to their standard repayment plan, and most federal student loans are eligible for lower or zero-dollar repayment plans if your income or other circumstances qualify.

If you work in a public service field and have federal loans, whether they are Direct Loans or FFEL program loans, you may be eligible for Public Service Loan Forgiveness. Learn more on the FSA website.

Should you consider student loan refinancing?

If you are continuing to make payments on your student loans or are beginning again when COVID-19 assistance ends, another option to consider is refinancing. Refinancing student loans is an easy process that can help you make the most of your financial situation.

ISL Education Lending offers student loan refinancing options that:

  • Allow you to combine your student loans into a single new private loan, making repayment easier if you have student loans with multiple lenders.
  • Provide you the ability to pre-qualify with no impact to your credit score. This lets you see what rates you qualify for, different term options and estimated repayment amounts.
  • Feature lower rates than you may be paying now or longer repayment terms if you need a lower monthly payment amount.
  • Have no application, prepayment or late fees.
Still in college or helping your child pay for college? You may be able to refinance existing loans to a lower rate now and continue deferring repayment until college is finished.

Learn more about our Reset Refinance Loan today and see if refinancing your student loans will benefit you. Pre-qualifying takes about a minute and any potential cosigners can pre-qualify too. If you apply with cosigners, you will have the option to release them from their loan obligations after certain conditions are met.

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