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Now is the time to start preparing for when student loan payments resume

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Posted at 10:01 AM, May 28, 2021
and last updated 2021-05-28 10:09:35-04

With the COVID-19 grace period on student loans set to end on October 1, there are some things you may need to start preparing for now.

An expert with the National Foundation for Credit Counseling says to start by making a checklist.

“The next thing to do is to set reminders and these reminders have to do with key points in the timeline between now and October 1. You want to set reminders for getting in touch with your servicer, you want to set reminders for when your payments begin, and you want to document all communication that takes place between your student loan servicer and you,” said Bruce McClary with the National Foundation for Credit Counseling.

It's important to get this in order now because there's a lot that may have changed for you since last March that could impact your payments.

According to a survey from Student Loan Hero, 55% of borrowers say they're not confident they'll be able to afford their payments in October.

This could be because you're worried about paying for food or rent, or maybe you took loans out on a new house or car you now have to budget in.

But an advantage to preparing now could mean avoiding consequences to loans you may have paid late in the past for these reasons.

“If any of them are delinquent or in default, those are the loans, you really want to attack first and the best thing you can do is rehabilitate them or come up with a plan to rehabilitate them before the suspension ends,” said Andrew Pentis with Student Loan Hero.

That means you won't have to deal with those consequences again in the fall.

If your income has changed, you also want to make sure you get that information to your loan provider.

“You may have to resubmit your most recent taxes, so now is the time to get started on that, especially because if you have to resubmit your taxes. That process typically takes a couple of months to complete,” said McClary.

Without your tax information to go off of, you could get hit with a big bill you're not prepared for.

You should receive a notice from your student loan provider soon about payments resuming.

For more resources on how to manage your student loan payments, you can visit NFCC.org or StudentLoanHero.com.