Important Student Loan Repayment Information

Important Student Loan Repayment Information

June 13, 2023

For more than three years, tens of millions of federal student debt holders had a break from paying off their loans, but that is ending very soon.

Last week, as part of the debt ceiling negotiations, the U.S. Government agreed to stop the pause on student loan payments.

Without a Supreme Court ruling before June 30, loan payments and accrual of interest on student loans will resume as early as Tuesday August 29th.

What should I do to prepare?

  • Create a profile or make sure your contact information is current to avoid missing crucial updates. This profile will be used to apply for repayment plans and complete loan counseling.

  • Contact your loan servicer. Now, not later, to save yourself from long hold times.

If you are not sure who your loan servicer is, log into your profile and view those details under the “My Aid” section. Once you connect, servicers can remind you what your payments and responsibilities are, help you enroll in affordable repayment programs and manage other logistics of paying student loan bills.

When can I expect my first bill?

You will receive your billing statement or other notice at least 21 days before your payment is due.  The statement should include the payment amount, due date, and any upcoming interest.

Can I do these things online?

Yes, you can update your contact information in your profile on your loan servicer’s website and in your profile. On your loan servicer’s website, you’ll also be able to register for autopay or re-enroll. It’s important that if you were enrolled in autopay before March 13, 2020, and not re-enrolled since, you must opt-in again or else your payments won’t restart.

What if I miss a payment?

A missed payment means your loan is delinquent. If your loan is delinquent for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus. Delinquency will affect your credit score, making it harder to get credit.

What if the Supreme Court makes a ruling?

The repayment pause is separate from a Biden proposal that would forgive an estimated $400 billion in student loan debt, a much-debated plan currently under review by the Supreme Court.

At this point, a Supreme Court ruling striking down the administration’s plan to cancel up to $20,000 in debt for about 45 million Americans with federal loans would only start the clock slightly earlier in August. 

If the Supreme Court says student loan forgiveness can go ahead, about 25 million Americans would still have to start paying. That’s because, of the roughly 45 million people who hold student debt, only about 20 million would have their debt completely erased, leaving 25 million who would still have to make some payments. The payments may just be smaller due to shrunken balances from forgiveness.

How can SMB Financial Strategies help?

The website provides a Loan Simulator tool to calculate a repayment plan and choose a loan repayment option that best meets your needs. You can also use it to decide whether to consolidate your student loans.

We are here to help guide you through this process and come up with a monthly payment plan that works with your cash flow and ensures that you are still on track for your various goals.

Don’t hesitate to email, call, or schedule a meeting to discuss this in greater detail. Make sure that you have your profile set up so we can review this tool together and make an informed decision!