For more than three years, borrowers had relief from federal student loan payments, but the pandemic-related pause is ending in October.
The Department of Education says you’ll get your first bill in September or October, and you’ll have 21 days to make your first payment.
Financial adviser Barry Glassman, president of the Tysons Corner- and Bethesda-based Glassman Wealth Services, said the October due date doesn’t give you much time to save, but it does give you time to review your current budget and see what you can tweak going forward.
“How are you spending your current funds?” Glassman said. “What are the fixed expenses, such as rent and utilities and things, and what are the variable things like nights out?”
Since so much time has passed, he suggests checking in with your service provider and making sure they have your most current contact information. And if you are worried about a big bill, call your provider and talk to them about repayment options.
There may also be income-based forgiveness programs if your income is lower than it was before the pause went into effect.
“It’s really important to understand and take this very seriously,” Glassman said.
The COVID-19 payment pause was axed in June, as part of the debt ceiling deal reached by President Joe Biden and House Speaker Kevin McCarthy.
Last week, the Supreme Court struck down the president’s plan to cancel billions of dollars in student loan debt.
The Department of Education said that the president is still committed to helping middle- and lower-income borrowers, including expanding who qualifies for a low-income repayment plan.
The department is also instituting a 12-month “on-ramp” beginning Oct. 1, meant to protect financially vulnerable borrowers from delinquency or other consequences of missed or late payments.
Borrowers are encouraged to explore income-driven repayment options at Studentaid.gov. The Education Department is also warning people to watch out for scammers who claim they can help lower or cancel your student debt for a fee.
