• John Caserta, MSFS, ChFC®

The Return of Student Loan Repayments

It’s been nearly two years since the government put federal student loan payments on hold. But beginning February 1st, more than 40 million borrowers will have to begin making payments again.


The pause on student loan payments began in March 2020 and was specifically for federal student loans but not private loans. This means there are no payments required, even for those in default, as well as no interest charged until February 1st, 2022.

In general, when it comes to federal student loans, you do not have to worry about rising interest rates since those have fixed rates. This means you’ll be paying the same interest rate as you were before. However, you might still want to be mindful of private student loans with variable rates. Depending on how they’re structured, you could potentially see increases in those rates, which would translate into increases in payments and overall interest that you’ll pay. Now this is where you might want to consider refinancing.


You might ask, "how will the start of payments affect the Public Service Loan Forgiveness Program?" Well, during the past 22 months, even though payments weren’t required and set at $0, those $0 “payments” counted towards the PSLF program. To continue making progress towards PSLF, you’ll need to start making those payments again.

To start preparing for the start or restart of student loan payments, make sure to determine when those payments will start for you. Be sure to go to studentaid.gov and look at details for all your federal loans. Then determine your servicer (i.e., who you will be making payments to, as this could potentially change, in which case the Department of Education will notify you. Additionally, make room in your budget and get a head start on getting used to those payments. Put aside the payment amount into a savings account.


If you can't afford your payments at the current moment, don't worry. Look at income-driven repayment plans, which could include but are not limited to:

  • Income-based

  • Income-contingent

  • Pay As You Earn

  • Revised PAYE (Cap repayments between 10-20% of discretionary income and have forgiveness after 20 or 25 years, but that could be taxable)

Furthermore, consider consolidating and refinancing, since it can potentially lower payments and interest rate, but be careful with federal student loans – these would be consolidated into a new private loan, which would affect eligibility for PSLF.

For trustworthy resources about student loans, visit StudentAid.gov to manage your federal student loans (National Student Loan Data System is part of that site) along with FinAid.org which is a free site with numerous resources.

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