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The pause on student loan payments is ending: How to prepare

What to do, how to budget and how to make your payments as affordable as possible

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The U.S. Department of Education recently announced that it was ending a three-year pause on student loan repayments. The COVID-19 emergency relief plan for federal student loans temporarily paused not only payments but also interest, giving many people the opportunity to handle the financial stresses of the pandemic without the additional burden of monthly student loan payments.

However, this relief plan is coming to an end. Federal student loans began accruing interest on September 1, 2023, and payments start up again in October.

Many people are still struggling financially, especially as inflation continues to consume more and more of our paychecks. If you aren’t ready to take on another monthly bill, what can you do?

The Department of Education offers a step-by-step checklist for people who are preparing for student loan payments to restart, so consider starting there. You’ll learn how to compare payment plans, apply for an income-driven repayment (IDR) plan, save on interest by setting up automatic payments and determine whether you qualify for loan forgiveness.

That said, some of us may need a little more help—so we brought in the experts.

“We are all creatures of habit,” says Jessica McDonald, Founding Advisor at Southern Wealth Builders, “and starting payments again will be hard, unless you prepare.”

McDonald has three tips to help you plan for the end of the pause on student loan payments, all of which can help you navigate this transition without getting lost in anxiety.

In this article:

Make a budget

“The most important thing everyone needs to do before payments begin again is to make a budget,” McDonald explains. “Being in control of your future starts with where your money goes every month.”

She’s right. When you make a budget—or update your existing budget—you’ll get a clear picture of where your money is going. You’ll also be able to make adjustments based on your new financial priorities.

If you were making payments on your federal student loans before the COVID-19 emergency relief plan kicked in, ask yourself what you’ve been doing with the extra money, and whether you can revert some of that cash back to its original purpose. While some of us put our extra money towards the rising cost of gas and groceries, others of us may have put the money we might have used on student loan payments towards savings, discretionary expenses or impulse buys.

“Assuming you’ve not been paying anything on your student loans for three years or more, what took the place of that payment?” McDonald asks. “Was it a car payment, or more takeout?”

One of the best ways to budget for student loan payments is to use the envelope system, which requires you to set aside money for future expenses—as well as savings, investments, vacation funds and other financial goals—as soon as your paycheck arrives. From there, you can spend any leftover money as you choose.

If you need additional help budgeting, check out our guide to the best budgeting apps of 2023.

Check your loan status

“The second most important thing is to log into your student loan servicer and double-check your loan status,” says McDonald. “If you’ve recently graduated, you may still be in the grace period, where payments are not yet required.”

The U.S. Department of Education offers a tool to help you find your student loan servicer, and notes that some federal student loans were transferred to new loan servicers after the payment pause began. Even if you aren’t a recent graduate, it’s a good idea to look up your loan servicer and log into your online student loan account. From there, you can check your loan status and confirm what your monthly payments might be.

Choose the most affordable loan payoff plan

“Lastly, your student loan servicer will have ways to calculate your loan payoff plan,” McDonald advises. “For most individuals, the SAVE Plan will be the most affordable.”

The U.S. Department of Education allows you to compare potential loan payoff plans through a tool called Loan Simulator. You can use this tool to find the best student loan repayment strategy—and if you think you might have trouble making your monthly student loan payments, you can also use this tool to explore your options.

The SAVE Plan is an income-driven repayment (IDR) plan that uses factors like income and family size to determine your monthly student loan payment. It is designed to be one of the most affordable student loan repayment plans, but it’s still a good idea to compare your options. You may even want to look into whether you qualify for student loan forgiveness programs.

If you already have an IDR plan set up, the U.S. Department of Education recommends recertifying your plan—especially if your income or family size has changed since the pause on student loan payments began. You may end up with a monthly payment that is better suited to your current financial status, and it might make it easier for you to pay off your student loans.

Need more help? Read our expert advice on how to manage your student loan payments, or take a look at our simple guide to paying for college.

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate,, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

Read more by Nicole Dieker

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Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

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