Here's how to prepare to start paying back your student loans when the pandemic payment freeze ends

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A three-year pause on federal student loan payments will soon end. Here’s what to know to get ready to start paying back loans:

“I was the first in my family to go to college, and I could have saved money with grants and scholarships had I known someone who knew about college,” she said. “I could have gone to community college or lived in cheaper housing … It’s a huge financial decision.”

Yes — payment plans are always available. Even so, some advocates encourage borrowers to wait for now, since there’s no financial penalty for nonpayment during the pause on payments and interest accrual. To determine whether deferment or forbearance are good options for you, you can contact your loan servicer. One thing to note: interest still accrues during deferment or forbearance. Both can also impact potential loan forgiveness options. Depending on the conditions of your deferment or forbearance, it may make sense to continue paying the interest during the payment suspension.

— Break up payments into whatever ways work best for you. You could consider two installments per month, instead of one large monthly sum.If you’ve worked for a government agency or a nonprofit, theoffers cancellation after 10 years of regular payments, and some income-driven repayment plans cancel the remainder of a borrower’s debt after 20 to 25 years.

 

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