When Will Student Loan Payments Come Back?

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Student Loan Payments

The COVID-19 pandemic upended Americans’ financial plans, leaving them panicked about how they were going to pay the bills. The government took action to ease some of the financial strain for struggling citizens, implementing financial aid programs, sending out stimulus checks and putting a temporary moratorium on student loan payments.

The federal government announced a moratorium on federal student loan payments in 2020 to help Americans facing economic hardship in the midst of the pandemic. Since that original announcement, the moratorium has been extended four times. The latest extension was announced in April 2022 by the Biden administration.

You may be wondering, when does the moratorium end?

The End of the Moratorium

The current extension for the federal student loan moratorium will end on August 31st, 2022. The US Secretary of Education, Miguel Cardona, said that there could potentially be another student loan moratorium extension past this point, but there has been no definitive announcement on the subject. It’s only a possibility at this point.

So, what does this mean? At the beginning of September, the pause on federal student loans will be lifted, and Americans will need to restart their payment plans.

If you’re one of those Americans, read ahead to see what you can do to prepare for this upcoming change.

Enroll In Auto-Debit Payments

Go to your servicer’s website and enroll (or re-enroll) in auto-debit payments — this is when your bill payments are automatically taken from your bank account on the due dates. Not only will this help you avoid late payments, but it can also inspire the servicer to reduce your interest rate.

Check Your Budget

Once you’ve confirmed how much your bill payments will be once the moratorium ends, you will have to determine how those payments will fit in with your personal budget. You will likely have to make some adjustments to comfortably manage these payments all over again.

Do not skip this step and assume that you can handle these payments without adjusting your budget. This can lead to financial mistakes, like accidentally draining your checking account. With a drained account, you might miss other important bill payments, go into overdraft or bounce a check — at the very least, your drained account makes you vulnerable to emergency expenses.

If you ever make this mistake, and you get hit with an emergency expense when you don’t have enough funds readily available, you could use a credit card or personal loan as a solution. With a credit card or personal loan, you could cover the urgent expense quickly and then focus on repayments later on.

When it comes to personal loans, search for online options that are specifically available in your state. So, if you live in Tucson, you should look for personal loans in Arizona — this will mean that you should be able to apply from your location. The simple step will save you time and effort in the application process.

Getting Help with Payments

What if you look at your budget and figure out that there’s no way you can cover your student loan payments, even with adjustments? Then, you may want to switch your repayment plan to accommodate your financial needs.

Try applying for an income-driven repayment plan. An IDR plan will base your payments on your income and your family size. The switch could make your bills more affordable once the moratorium ends.

Don’t wait until September to do something. Prepare for student loan payments now!

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