Since the beginning of the pandemic, federal student loan payment requirements have been paused for eligible borrowers with interest and collections likewise suspended. With pandemic student loan relief ending on January 31, though, many borrowers are wondering what the future of student loan payments looks like. Though the relief has been extended multiple times previously, the administration is holding firm that the extension through January is the final one, so borrowers should be prepared to resume regular payments in February.
Borrowers will soon be receiving a great deal of communication from their loan servicers and the Department of Education in regard to payment expectations, with many borrowers already receiving notifications that they should begin planning on resuming payment. It’s imperative to have updated contact information so that you receive important notices about your loans. If you have made a move or changed your phone number or email, make sure you have provided your correct details to your loan servicer. Likewise, if your banking information has changed, notify your servicer.
Prepare for Possible Changes in Student Loan Servicers
Borrowers whose loans had previously been serviced by FedLoan Servicing or Granite State Management and Resources need to be especially careful to have updated information on file as these services have declined to renew their contracts with the Department of Education. This means that loans serviced by them will soon be assigned to a different servicer. Make sure to download and save any records and correspondence that might be necessary for the future to establish past payments or agreements. If you have been on the Public Service Loan Forgiveness (PSLF) track, you should double-check that your records are up-to-date and accurately reflect your progress.
Pay Attention to Targeted Loan Forgiveness
Through executive action, the Biden administration has already canceled billions of dollars of federal student loans. The benefactors of this student loan forgiveness have been targeted groups participating in existing programs such as the Total and Permanent Disability Discharge program and the Borrower Defense to Repayment program. Though this has been significant to those who qualified, there is still great pressure on the administration to cancel further student loan debt. Should this happen, it will likely continue in this targeted manner addressing programs that have proven problematic, such as the Public Service Loan Forgiveness program.
Be Wary of Scams
The fluid nature of student loan management over the pandemic has made the landscape prime territory for those wishing to scam unsuspecting and confused borrowers. Pay attention to communication you get regarding your loans and check that all offers or payment plans are coming directly from your student loan servicer or the Department of Education. Often, scammers will masquerade as the Department of Education, so verify that any communications purportedly from them or your loan servicer are legitimate. Be especially on the lookout for any companies proposing special payment offers that sound too good to be true or require paying exorbitant fees.
Sign in to your student loan accounts today and begin preparing for changes to come. With smart financial planning, resuming payments on your student loans can be relatively painless. If you need help planning for the resumption of your student loans, particularly with how it fits within your overall financial plan, let us know. We are happy to help!