Update: On Wednesday April 6, President Biden announced that the payment pause on federal student loans will be extended through August 31, 2022.
After a sixth pause was approved, federal student loan payments are planned to resume in August 2022.
What happened to loans during the moratorium?
If you made any payments during the moratorium, the full amount will be applied to your principal. If you didn’t make payments, you won’t be worse off because interest did not accrue on your loans. Essentially, the interest rate was set at 0%.
How will payments resume?
You will receive a billing statement at least three weeks before your payment is due – but keep an eye out because your servicer might have changed. Navient, PHEAA/FedLoan Servicing, and Granite Slate no longer offer student loan servicing, so loans held under them have been transferred. Additionally, be sure to update your StudentAid.gov account.
Is your budget ready for this?
Be ready to include your student loan payments back into your monthly budget. If you’re not sure how to balance other financial goals while paying down student loan debt, a financial planner can help.
Working with a financial planner can help you develop a clear picture of your financial situation by reviewing your income, assets, and liabilities, while also evaluating your insurance coverage, investment portfolio, and tax exposure. Then, together you can create a plan to establish and prioritize financial goals and implement strategies to work towards these goals.
If you’d like to get started on your own financial plan, contact me today.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.