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How to manage your student loans after a layoff

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If you lost your income and have federal loans, an income-driven repayment plan can temporarily shrink your payments to $0.

You can sign up for an IDR plan at any time, including after a layoff.

And unlike other IDR plans or some unemployment deferments, unpaid interest will not build if you’re on the SAVE plan, which could save you a lot of money in the long run.From Oct. 1, 2023, to Sept. 30, 2024, borrowers who don’t make payments won’t be penalized under aincluding no defaults, decreased credit scores or garnished paychecks. However, this is not an extension of the payment pause.

The on-ramp isn’t for everyone, Stark says. Interest will still accrue, increasing the amount you may eventually pay back, and payments are still due. Pay your bills if you can, either under an IDR plan or another repayment plan. However, depending on the type of federal loan you have, a deferment could increase the amount of interest you’ll eventually pay.

 

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