Here’s the ‘most likely scenario’ for when student loan payments could restart — and how to prepare

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1. Connect with your servicer

During the Covid-19 pandemic, several of the largest companies that service federal student loans announced they’ll no longer be doing so, meaning many borrowers will have to adjust to a new servicer when payments resume.

Three companies that serviced federal student loans — Navientthe Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State — all said they’d be ending their relationship with the government.

As a result, about 16 million borrowers will have a different company to deal with by the time payments resume, or not long after, according to Kantrowitz.

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Double-check your servicer has your current contact information, so you receive all the notices about the upcoming change, experts say.

Affected borrowers should get multiple notices, Buchanan said.

If you mistakenly send a payment to your old servicer, the money should be forwarded by the former servicer to your new one, he added.

2. Find an affordable repayment option

Many people’s lives have been changed by the Covid-19 pandemic. If your circumstances look different than they did three years ago, it may make sense to review the payment plans available to you and find one that’s the best fit for your current situation.

In the meantime, the law has also changed.

Student loan forgiveness is now tax-free until at least 2025 because of a provision included in the $1.9 trillion federal coronavirus stimulus package President Joe Biden signed into law March 2021. That policy will likely become permanent.

This may make income-driven repayment plans more appealing, since they often come with lower monthly bills and borrowers will likely no longer be hit with a massive tax bill at the end of their 20 years or 25 years of payments.

Meanwhile, the Biden administration is also working to roll out a new income-driven repayment plan that would slash some borrowers’ payments in half.

But if you can afford it, the standard repayment plan is just 10 years.

To calculate how much your monthly bill would be under different plans, use one of the calculators at or, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

If you do decide to change your repayment plan, Mayotte recommends submitting that application with your servicer before payments turn back on.

“I have significant concerns that there will be some big servicing delays,” she said.

3. Have a plan if you can’t make payments

If you’re unemployed or dealing with another financial hardship, you’ll have options when payments resume.

First, put in a request for economic hardship or unemployment deferment, experts say.

Those are the ideal ways to postpone your federal student loan payments because interest usually doesn’t accrue under them, as long as they’re subsidized undergraduate student loans.

If you don’t qualify for either, however, you can use a forbearance to continue suspending your bills. But keep in mind interest will rack up and your balance will be larger — sometimes much larger — when you resume paying.

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