The student loan payment pause is ending. Here’s how to prepare


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A pause on student loan repayments will continue until May 1, the Biden administration announced. The news came less than two weeks after press secretary Jen Psaki told reporters payments would resume in February.

When polled about a February restart, many borrowers said they weren’t ready, a November survey from the Student Debt Crisis Center revealed. Of the 33,703 survey respondents, nearly 90% said they aren’t financially secure enough to start paying again. One in five borrowers said they never will be.

While there is more time until the Department of Education begins collecting again, now is the time to notify your loan servicer if you’re dealing with a financial hardship, such as unemployment, or you want to explore other repayment options.

While the Biden administration has forgiven more than $12.5 billion in student loans this year for certain vulnerable groups and expanded eligibility for the Public Service Loan Forgiveness program, widespread loan cancellation isn’t likely to happen anytime soon.

Here’s how you can prepare to pay student loans again.

1. Find out what you owe

The Student Aid office of the U.S. Department of Education recommends borrowers update their contact information on and on their loan servicer’s website as soon as possible.

If you’re one of the nearly 16 million borrowers who has been transferred to a new loan servicer, a different company will now handle the billing for your loans. Look for an email or letter with instructions for creating an online account.

Depending on the type of loan you have, you might have a different monthly payment than before the pause went into effect. Log in to your account on your loan servicer’s website or call them directly to confirm what you owe and when. Making on time payments is key to maintaining a good credit score.

If your loans were in default before the temporary relief period began, collections agencies can start contacting you again. Call your student loan servicer now to discuss your options, including a loan rehabilitation program or consolidation, if you can’t afford to pay your balance, and read our playbook on dealing with debt collectors.

2. Review your budget

The pandemic changed many people’s income and spending habits. Borrowers who haven’t had to pay their student loans since early 2020 might have different financial priorities now.

Take a fresh look at your budget to see where you stand. Add up all your basic monthly costs, from housing and transportation to groceries and debt payments, including your new student loan payment.

Make a separate list of how much you spend on discretionary items, like shopping and subscriptions. Then subtract your total basic monthly costs from your monthly income.

Say you spend $3,500 a month on rent, food, your car payment, your student loan payment and a few other necessities, and your income is $5,000 a month (if you don’t earn steady income, take an average of the last three to six months). You would have $1,500 left over each month after covering the basics, so you can start adding back in discretionary purchases. If your income doesn’t cover your bare necessities — say you earn $3,000 a month with expenses topping $3,500 — then it may be time to apply for a new student loan repayment plan to reduce what you pay each month.

3. Explore a new repayment plan

Applying for forbearance or deferment to keep your payments on pause are options in dire circumstances. But if you’re bringing home a paycheck, try to keep paying what you can.

Use the loan simulator tool on the website to compare repayment plans or to decide whether to consolidate your loans, which can also save you money in the long run.

Income-driven repayment plans are an option for borrowers looking to lower their payments to as little as $0 a month. How much you pay depends on your annual income and family size, but it won’t always be less than the standard repayment plan.

Get in touch with your student loan servicer to see if you qualify. And be sure you understand how switching to a different plan could impact your repayment timeline. It’s common for an income-driven repayment to lower a borrower’s monthly payment but add an extra 10 to 15 years of payments.

If you were already enrolled in an income-driven repayment plan before the pandemic, check with your loan servicer to see about recalculating your payment based on your current income.

4. Set up auto-pay to save money

Setting up automatic payments with your student loan servicer can get you a 0.25% discount on your interest rate.

If you were signed up for autopay prior to March 13, 2020, then you will need to re-enroll with your student loan servicer before payments resume. The same goes for borrowers who were transferred to a new loan servicer.

5. Be on the lookout for scams

All the resources you need to manage your student loans are available through and your student loan servicer — for free.

As the student loan payment deadline nears, scammers are on the hunt for vulnerable borrowers. Ignore offers from companies that promise to eliminate your debt for a fee or ask you for personal information about your debt situation.

Stay in touch with your loan servicer and check with them before accepting any third-party assistance to pay your student loans.


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9 smart ways to pay off student loans


No one ever wants to talk about the unglamorous work that goes on behind the scenes, but it’s the unspoken progress that makes or breaks every successful business owner, athlete, or creative person. It is helpful to have this mindset and to think about student loan repayment like any other big feat worth accomplishing.

It begins in knowing that paying down student loans in a way that is financially smart and effective takes time and effort, most of which lies in the preparation — the proper planning, budgeting and education will make tackling your student loans during the next decade or more so much easier.

While there is no one single smartest way to pay off student loans, there are steps that you can take that will put you in the best position to pay off your student loans on a timeline and with terms that work best for you. In addition to understanding your student loans, your goal should be to build an overall financial plan that includes your loans.

Related: Why your student loan balance never seems to decrease

9 ways to pay off student loans

If you want to understand how to repay student loans in the smartest and most financially responsible way possible, here are nine steps to implement in your loan repayment plan.


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Keeping track of all of your student loans and other sources of debt can be tricky, especially if you are a recent graduate. Your first step should be to organize them on a list. On your list should include the loan service provider (the bank, federal government, or private lender), amount of the loan, monthly payment, interest rate and when the loan will be paid off in full.

If you aren’t sure what your monthly payments on your student loans will be, you can use our student loan calculator. This calculator estimates how much you could be paying each month on your student loans.

If you have credit card debt or other personal loans, include these on your list. With all of your sources of debt, mark on a calendar the date that the monthly payments are due.

While you always need to make the monthly minimum payments on all debts (unless your student loans are within their grace period or are in forbearance), listing them out allows you to identify which debts to pay off first. If you have high interest credit cards adding up each month, a credit card consolidation loan may be a great option to look at.

Once your credit cards are paid off, you’ll want to think about whether your goal is to pay your loans off quickly, or to simply make the monthly payments until the loans are done. The former is a good way to save on interest over time.

Some folks do prefer to pay only the minimum monthly amount on their student loans so that they can save and invest while they pay down their student loans.

If the interest rates on your student loans are low, this may be a good reason to start investing with your extra funds, in order to take advantage of compound returns. If the interest on your loans is higher than you could reasonably expect to make investing, it might make more sense to pay off your loans first. Which option is right for you is a completely personal decision.


No matter who you are, learning how to budget your money should be on the top of your financial to-do list. It takes time and effort to develop a budgeting system that works for you, but it is doable, and totally worth it. To get started, track your monthly cash inflows and outflows for two months.

Total up how much money you spent in each category, including debt payments like student loans. Once you have a general idea of what you’re spending in each category, you can begin to build a budget framework. For example, if you spend $260 on groceries one month and $300 the next, you can now set yourself a realistic grocery budget. Leave room for annual, bi-annual and quarterly expenses, as well as incidentals.

With a budget that is built to include student loan payments, you’ll be more equipped to make all of your payments on-time and know how much is available to spend on other needs and wants. Also, understanding exactly how you’re spending allows you to identify the areas where you’re overspending.

For example, a close look at your budget could reveal that you’re spending more than you realized on dining out, subscriptions, clothing, or even rent — and gives you the power to make a change. And by saving money in other categories, you’ll free up money to apply to your financial goals.


Hopefully, your student loans are already set up to be automatically deducted from your bank account. (This is a good strategy for all your monthly bills.) If they aren’t, contact your student loan service provider to set it up. This way, you’ll never miss a payment because you forgot or are somewhere where you can’t access the internet.

Remember, every time you miss or are late on a payment, it negatively impacts your credit score. Bad credit could preclude you from opportunities in the future, such as being able to refinance your loan to a lower interest rate. Take every extra precaution to make sure your loans get paid on time.

As an added bonus, some service providers offer a discount, usually.25%, if you arrange to pay by automatic payments. When you sign up, be sure to ask if such a discount is available.


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Most student loans allow you to pay more than the minimum monthly payment, and doing so can be a great strategy if your goal is to pay back your loan faster than the stated term. In addition to a faster payoff, you can save on interest over the life of the loan. Even small amounts make a difference. One drawback is that some providers have prepayment penalties. When you contact you student loan service provider, be sure to ask if they charge such fees.

To do this, call your loan service provider to adjust your automated monthly payment to a higher amount, and clarify that you want that money dedicated to the principal of the loan. Make sure, after the next month’s payment, that the money was indeed put towards the loan’s principal.

Looking for more advice on paying down your student loans? SoFi’s student loan help center offers tips, guides and resources on all things student loans.


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Increasing your monthly payment isn’t the only way to put a dent in your loans; at any point, you are allowed to make a lump sum payment towards the principal of your loan. This is a great way to speed up the student loan repayment process without having to commit to paying more each and every month.

You may have more opportunities to do this than you think: Utilize your tax refund, holiday money, birthday money, work bonuses or inheritance money. Additionally, putting income from a side hustle or other passive income towards student loans could be a financially rewarding move over the long-term.




Most federal student loans come with a standard, ten-year repayment plan. With federal loans, there are other options for repayment plans with lower monthly payments, calculated using your income. These plans lower your monthly payments by extending the length of your loan, usually from ten years to twenty or more years.

When you choose one of these options, it is important to know that even though your monthly payments are lower, you can end up paying more in interest over time. Therefore, it’s not a great choice if you want to pay off your loans quickly or pay as little in interest as possible, but it is available to those who are having trouble making their monthly payments.

If you are planning to utilize the Public Student Loan Forgiveness program for your federal loans, you will need to select one of the income-dependent repayment programs.




When you refinance a loan or multiple loans, a lender pays off your current loan(s) and provides you with a new loan, ideally at a lower rate. A lower interest rate could mean savings over the life of your loan.

Though refinancing might not be the right option for everyone, it’s a strategy that every student loan holder should, in the very least, research and consider. Also, understand that while refinancing can consolidate multiple loans, federal loan consolidation is a different process. With federal loan consolidation, the government bundles your loans together into one, using a weighted average of the interest rates.

If you are able to refinance to a lower rate, you will want to ask yourself whether the purpose is to lower your monthly payment but keep the same term, freeing up some money in your monthly budget, or to keep your monthly payment the same (or higher) and to shorten your term so that you can pay off your student debt faster.

Exploring refinancing with a private lender usually doesn’t take a lot of time and it doesn’t cost you anything.


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With all raises, you can use the extra income towards your financial goals. This could mean increasing the monthly amount you pay towards your loans, making the occasional lump sum payment towards the loan with the extra windfall, and/or saving and investing money for your other long-term financial goals.

How much money you earn is an important factor contributing to your financial stability and ability to pay down your student debt. While budgeting is important, so is knowing your worth and asking for more when you deserve it. If you haven’t already, start keeping track of your successes now so that at your next compensation conversation, you’re loaded with concrete data on why you deserve a bump.


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Although not yet as widespread as retirement or healthcare benefits, more employers are offering student loan repayment help as a benefit to attract and retain employees.

Depending on your personal situation, student loan repayment help could be as important than a raise or other benefits. Whenever you’re comparing job offers, it’s critical to understand and compare benefits packages, because although they’re not flashy like a big salary or company equity, benefits can be just as valuable.

If you’re looking for a new job, include student loan repayment help in your search. While it shouldn’t be your only consideration, it’s great to have an idea of what you’re looking for in an employer.

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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.




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