When Do Student Loans Resume and How Can I Make Space for Them in My Budget?

Normally, student loan repayments are due every month for borrowers who have graduated and have passed the grace period. However, there has been a student loan repayment moratorium in place since the beginning of the COVID-19 pandemic. 

At the start of COVID-19, the Department of Education paused all student loan repayments while also temporarily lowering the interest rate to 0%. This gave borrowers relief from their payments and helped to stimulate the U.S. economy. 

Now the program is coming to a close, and many are wondering — when do student loans resume? 

When do student loans resume?

Student loan repayments will resume after August 31, 2022, unless action is taken by the Biden administration to extend that deadline. 

That means payments will resume starting in September 2022. Your payment date will be determined by your lender, but your first payment is likely to be due at some point in September. 

How can I prepare?

The last thing you want to do is fall behind on payments, so it’s important to be prepared. It’s been more than two years since loan payments have been due, so you may need a refresher on what to expect.

Determining your loan servicer

Loan servicers are the companies that manage loans and accept payments from borrowers. For private loans, the servicer is usually the company you applied with originally. For federal loans, this will be a private company like FedLoan, Great Lakes, or Nelnet. 

The loan servicer is the company you will make payments to and where you'll direct any questions you might have. 

To find out who your loan servicer is, you can log into and check your dashboard on StudentAid.gov, then scroll down to the “My Loan Servicers” section. You can also call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

Update your contact information

If you have moved, changed your phone number or have other relevant changes, it’s important to update your information. You should do this on your StudentAid.gov account, as well as directly with your loan servicer. 

It’s very important to update your mailing address and email address so that you are sure to receive bills and other communications in a timely manner. 

Confirm your due date and amount due

You can contact your loan servicer to determine your due date and the amount of your payments. Alternatively, simply wait for your first bill to arrive — servicers are required to send out bills at least 21 days before the payment due date. 

Set up auto-pay

To stay on top of your bills, it’s wise to set up auto-debit to automatically pay your student loan bill each month. You can do this online through your loan servicer’s website, or by calling in.

Apply for Fresh Start

If you were behind on payments, or your student loans were in default prior to the moratorium, the Fresh Start program is worth exploring. 

This program provides a clean slate for borrowers who were in default. If they qualify, borrowers can have the delinquency or default removed from their credit profile, and payments will resume as normal and with the loans in good standing. 

Fitting student loan payments back into your budget

It’s been a few years since monthly payments have been due — so your budget may need a refresh in order to make room. The first step is to determine how much your payment will be. You can do this by contacting your loan servicer or waiting for your first bill to arrive. From there, here’s what to consider. 

Revisit your budget

You’ll need to make room in your budget for student loan repayments. Budgeting isn’t a one-size-fits-all system, so think about where you may be able to make adjustments. 

This might mean cutting back on optional spending, like restaurants or subscriptions. Or it might mean reducing the amount you are saving or investing each month. Either way, the idea is to think proactively about how to cover the expense. 

Boost your income

Increasing your income is another way to cover rising expenses. This might mean negotiating for a salary increase. Particularly in this economy, employers are eager to keep staff on board — so it might be a good time to ask for a raise. 

Or, it might mean picking up a side hustle. You could drive for a rideshare company, pick up freelancing online or even start a part-time job. 

Consider an income-driven repayment plan

For federal student loans, income-driven repayment plans are available for qualified borrowers. These plans adjust your loan payment based on your current income. For low-income borrowers, this often results in a lower monthly payment. Borrowers on these plans may also be able to extend payment deferment if they have little to no income. 

You can use the Loan Simulator feature at studentaid.gov to experiment with different repayment plan options. 

Consider refinancing

If you’re in a good financial situation, with good credit and income, it may make sense to refinance your student loans. This process involves applying for a new loan with a private lender, and using this loan to pay off your existing debt. 

For well-qualified borrowers, this could potentially result in a lower interest rate. It can also consolidate multiple loans into one, which can simplify your finances a bit. 

It's important to note, however, that refinancing federal student loans with private student loans will mean forfeiting any federal benefits that may be available to you. Temporary loan relief through forbearance or deferment, income-driven repayment plans and federal loan forgiveness programs are only available for federal student loans.

Wrapping up

When do student loans resume? After the August 31, 2022 deadline. Your first payment will likely be due within the month of September. You can check with your loan servicer for your payment amount and due date. 

To prepare, make sure your contact information is up to date, and prepare your budget for the added expense. It’s also wise to set up automatic payments so you don’t fall behind. 

Student loan debt is not the only type of debt you should be proactive about. Credit card debt is even more costly and can be more damaging to your finances. 

If credit card debt is holding you back, check out Tally† Tally is an app that helps qualifying applicants consolidate credit card balances into a lower-interest line of credit. Learn how Tally works.

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.