How to Prepare for the Pause on Federal Student Loan Payments
What you need to do to prepare accordingly for October 1st, 2021
The CARES Act that passed on March 27, 2020, paused federal student loan payments through Sept. 30, 2021 and temporarily set the federal student loan interest rate to 0%. The pause has provided significant relief for the roughly 42 million Americans who owe federal student loans. But the policy is set to expire on Oct. 1, 2021.
Below are some proposed tips to help you prepare when payments resume.
- Check if your lender has up-to-date contact information since you might have moved during the pandemic. You can confirm that the lender has the right info just logging into your account online. That way, you will hear directly from the lender all the relevant information on when you will resume payment.
- 2. Create a personalized plan for when federal student loan payments resume. It could be great if you can continue to pay down your student loan during the pause to pay your loan principal faster. Also, if you can, begin building a student loan payment back into your monthly budget by putting payments into a savings account so you are prepared when October 1st
- Check your balance so you can make the right financial decision based on your budget. You might consider enrolling in an income-driven repayment plan, especially if your income has changed during the pandemic.
Analyze how your finances may have changed since the pandemic started. Are you changing your living and work situation? Has your income changed? Understanding your new budget and lifestyle will allow you to make the right decision for you!