If you put your federal student loan payments on hold during the pandemic, payments are expected to resume in January, 2021, even as more than 11 million Americans remain unemployed. 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March, 2020 gave what’s known as a grace period for many people who have federal student loans, or loans underwritten by the government. This student loan grace period was initially scheduled to end on September 30, 2020, but because the pandemic continues to affect Americans, the period was extended through the end of 2020. During this time, federal student loans have not accrued interest. So if you haven’t been making your payments during this time, you probably haven’t incurred any interest or penalty charges. 

The student debt crisis affects more than 43 million Americans who have student loans, amounting to a total $1.5 trillion in debt, as of June, 2019. The zero-interest period was intended to give financial relief to those who lost all or part of their income as a result of shutdowns caused by the pandemic. If you have federal student loans, this grace period has likely applied to you. 

Whether you’ve continued to make payments all along, or  you’ve taken this time to save some money, here are some things to consider as you prepare for the likely return of student loan bills every month.

Know what’s happening with your loans

While loan repayment is currently planned to pick up again in January, the grace period could be extended yet again, according to Forbes. Keep up with any changes from Congress, either during the end of President Trump’s term, or once President-elect Joe Biden takes office. Biden has said that he would push to provide $10,000 in stimulus student loan relief to those with student loans during the pandemic. 

Also, consider reaching out to your loan provider so you know exactly when your next student loan payment will be due. And find out how your payment has changed if it has. The sooner you can start paying  off your student loans, the better. Making payments during a period of zero interest can help you make a serious dent in the principal, or original amount you borrowed, as there are no additional interest charges during a grace period. If you have multiple student loans, you may also want to take advantage of the zero-interest period by either paying off, or putting more money toward, the loans that have the highest interest rate.

Research a new repayment plan

If you’re daunted by upcoming payments, it might be time to revisit your repayment plan. “For those who have lost their job or part of their income, I suggest that they reach out to their student loan company now and ask about an income-based repayment plan,” says Orlando, Florida-based financial advisor Danielle Barak from financial planning company Northwestern Mutual.

Consider applying for an income-driven repayment plan, which may take into account different factors such as your income and the size of your family, according to the U.S. Department of Education’s division of student aid. If you’re approved for this change, you’ll pay your student loans back according to a percentage of your discretionary income. 

Barak warns, however, that “income-based repayment can get expensive as income drastically increases, so it’s important to know your options and if you can change the option you select.” Once your employment status changes, you may want to adjust the way you pay back your loans.

You may already be repaying your loans on an income-driven plan based on pre-pandemic employment. In this case, “recertify your income using your most recent pay stub showing your decreased income, or file your taxes early in 2021 and use your tax return to recertify your income,” says Jared Andreoli, a financial planner from Simplicity Financial in Milwaukee, Wisconsin. 

Contact your provider

If you’re unemployed or you’ve had a change in income, you might feel like you won’t be able to make any student loan payments whatsoever. Financial planner Joseph Orsolini from College Aid Planners in Glen Ellyn, Illinois, says that “borrowers that may have difficulty making their payments again should get in contact with their loan servicer about options available to them.”

“Most federal borrowers will be eligible for deferment or forbearance, which would allow them to continue not making payments,” says Orsolini. You’ll need to apply for student loan deferment or forbearance through your provider. Deferment and forbearance are slightly different. When you defer your loans, you’ll be able to skip make payments for a period of time without accruing interest. Student loan forbearance means that you’ll skip payments, but you’ll still accrue interest during the period of forbearance.

Orsolini suggests first looking into deferment. He also says, however, that borrowers might have more luck applying for forbearance as it has fewer qualifications than deferment. Deferment is usually granted in the case of certain qualifying events, such as unemployment, military service, or ongoing cancer treatment.

Do what you can to make the minimum payment

As the Covid-19 student loan grace period comes to an end, one thing you can consider is preparing to make at least the minimum payment each month towards your student loans. If you’re receiving unemployment payments or have money saved, such as your CARES Act stimulus check, think about using that money for loan payments, if you’re able to.

For people who might not have the option to defer on their loans, or want to continue making payments, Barak says, “I’d suggest working through their budget and examining their savings account to see what they can do. If there’s any side income that they can make to pay at least the minimum payment that would be ideal so this way their credit won’t be compromised.” 

If you don’t already have a budget, now is a great time to consider building one, such as the 50-30-20 budget, which allocates 50% of your income towards your essential, fixed expenses, 30% to your nonessential, variable expenses, and 20% to investing and savings. Include your student loan payments, as well as any other payments towards debt, in the 50% portion of this budget. You can also try other budgets such as the envelope method.

Stash can help you stay on top of your budget. In your Stash account, you can create partitions1 for your bills, such as your student loans. You can also create partitions to help you save as the pandemic continues. Additionally, you can use Stash’s Bill Pay2 function in the app to pay your student month bill every month. Bill Pay allows you to schedule payments so that you don’t miss them and hurt your credit.

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