Student Loans: Preparing For Repayment

(Updated January 2022)

As of March 31, 2021, student loan debt topped $1.6 trillion, and 1 in 8 Americans had student loan debt.

Because of the coronavirus pandemic, the Federal Government paused payments and zeroed out interest rates on Federal Student Loans until May 1, 2022. However, now is the time to beginning planning for repayment.

Preparing for repayment to resume

According to, there are three steps you can take now to make the transition to repayment once the pause ends:

1. Update your contact information in your profile on your loan servicer’s website and in your profile.

2. Check out the Loan Simulator to find a repayment plan that meets your needs and goals or to decide whether to consolidate.

3. Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your payments more affordable, depending on your income and family size.

When the student loan payment postponement ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due. So now is a good time to plan how you will add this payment back into your budget. You can use’s Loan Simulator to review your repayment options

Auto-Debit payments

When payments on Federal Student Loans were paused, automatic payments were paused as well. Auto-debit payments will resume automatically on your first due date when payments begin again. If you have a FFEL Program loan in default that is not owned by the US Department of Education (ED), check with your guaranty agency about your auto-debit options.

Contact your loan servicer if you are unsure when your payment is due, how much your payment will be, and if you need to update your bank information.

If your Federal Student Loan was in default

The Department of Education stopped the collection of defaulted federal student loans until May 1, 2022. This included garnishment of wages, tax refunds, and Social Security Benefits. If your loan was in default prior to the pandemic and you were working to rehabilitate your loan, depending on when you started you may already be out of default. If you weren’t in the rehabilitation process, the collection activity may resume in June 2022.

What you can do right now

In addition to preparing for repayment, there are some things you can do right now to take the sting out of your student debt:

  • If your loan was in default and you can afford to – pay the full amount of the accrued interest. Any additional payments during the 0% interest rate period will pay down your principal balance.
  • If you can afford to make payments on your Federal loans. Do so. Again, any payment will pay down that principal balance.
  • If you are worried that you won’t be able to make loan payments once the pause ends (May 1, 2022), research your options using’s loan simulator or contact your loan servicer.
  • New for 2022 – If you were working towards qualifications for public service loan forgiveness (PSLF), there were some changes which were announced in October 2021. You have til October 31, 2022, to take advantage of the changes. You can find more information about the changes on the Education Department’s website.

Parting thoughts…

  • If you were lucky enough to have attended certain universities and colleges during 2020 and 2021, like Cheyney University and the Community College of Philadelphia, they are using some of their stimulus money to pay off unpaid student balances from 2020 and the spring 2021 semester. 
  • The best way to keep student debt under control is to not take any more debt than your anticipated starting annual salary. If you are not sure what you want to do or must finance your entire four years, consider a community college. And get the degree! College credits fall off after a period of time, but a 2 or 4-year degree lasts forever.
  • Student debt is the single biggest obstacle to realizing your dreams. If you need help with your finances, contact Clarifi at (800) 989-2227 or go to to schedule a free financial health appointment.