Don’t Delay: A Guide to Managing Student Loan Payments

If you’re a borrower with student loan debt, it’s important to take action now and not wait until the last moment to figure out your payments. Justin Draeger, President and CEO of the National Association of Student Financial Aid Administrators (NASFAA), has emphasized the need to explore different repayment options available. From deferment and forbearance options to income-driven repayment plans, we’ll cover the various options in this guide. Making educated decisions when it comes to repaying your student loan debt begins by understanding the available options. Deferments and forbearances offer temporary relief from payments, but interest continues to accrue on all loan types with forbearance. Income-driven repayment plans such as Saving on A Valuable Education (SAVE) plan adjust monthly payments based on income and family size, making them more affordable for borrowers who experience fluctuating incomes.  To ensure you’re selecting the plan best suited for your financial situation, take advantage of online tools provided by the Department of Education; logging into your account on gives you access to their federal loan calculator which allows you to compare different repayment plans.


Student loans: Don’t wait until the last moment to figure out payments, expert warns

If you’re one of the millions of borrowers who have been dreading the restart of student loan payments, it’s time to take action. Justin Draeger, President, and CEO of the National Association of Student Financial Aid Administrators (NASFAA), urges borrowers not to wait until the last moment to figure out their payments. In this comprehensive guide, we will explore the various options available to help you manage your student loan debt efficiently. From deferments and forbearances to income-driven repayment plans, we’ll cover it all.

Exploring Your Repayment Options

When it comes to repaying student loans, many borrowers are unaware of the plethora of options available. The first step in managing your student loan debt is understanding your repayment choices.

Deferments and Forbearances: Temporary Relief for Student Loan Payments

Deferments and forbearances are essential options for borrowers facing financial challenges and temporarily unable to make their student loan payments. Here’s a more detailed explanation of each:


A deferment is a period during which you are allowed to temporarily postpone your student loan payments. What sets deferments apart is that for subsidized loans, the government covers the interest that accrues during this period. This means that if you have subsidized loans, you won’t be responsible for the interest that accumulates while your loans are in deferment. This makes deferment an attractive option for borrowers facing genuine financial hardship.

However, it’s important to note that not all loans qualify for deferment, and eligibility criteria may vary. Common reasons for deferment include enrollment in a graduate program, unemployment, economic hardship, and active military duty.


Forbearance is another temporary relief option for student loan borrowers. During forbearance, you can either temporarily halt your payments or reduce them to a lower amount. Unlike deferment, interest continues to accrue on all types of loans during forbearance, which means that your loan balance may increase over time.

Forbearance can be granted for various reasons, including financial difficulties, medical expenses, or other personal challenges. It’s important to carefully consider forbearance, as the interest that accrues can lead to a larger overall loan balance. Exploring other repayment options before opting for forbearance is advisable.

Income-Driven Repayment (IDR) Plans: Tailoring Payments to Your Financial Situation

Income-driven repayment plans are designed to make student loan payments more manageable by adjusting them according to your income and family size. Here’s a closer look:

Income-Driven Repayment (IDR) Plans:

Income-driven repayment plans are a boon for borrowers whose income fluctuates or may not be sufficient to cover standard loan payments. These plans include options like Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and the newly introduced Saving on A Valuable Education (SAVE) plan.

The standout feature of IDR plans is that they base your monthly payments on a percentage of your discretionary income, making them affordable even when your financial circumstances change. Furthermore, if your income is low enough, your monthly payment could be as low as $0, ensuring that your loan remains manageable during times of financial hardship.

Choosing the Right Repayment Plan: Making an Informed Decision

Selecting the appropriate repayment plan is pivotal in managing your student loan debt effectively. To help you make an informed choice, consider the following:

Federal Loan Calculator:

The federal loan calculator, accessible through your account, is a valuable tool for comparing various repayment plans. It takes your financial details into account, providing personalized estimates for each plan. By using this calculator, you can gain clarity on which repayment plan aligns best with your financial situation, making your decision more precise.

Contact Your Loan Servicer:

Don’t hesitate to reach out to your federal student loan servicer for personalized guidance. They possess a wealth of knowledge about the available repayment options and can offer insights into which plan suits your specific needs. By engaging with your loan servicer, you can navigate the process more confidently, ensuring that your chosen repayment plan aligns optimally with your financial goals.

In summary, deferments and forbearances offer temporary relief for student loan payments, with deferments being particularly advantageous for subsidized loans. Income-driven repayment plans, including the new SAVE plan, adapt your payments to your income, making them a flexible solution for borrowers. When choosing a repayment plan, make use of the federal loan calculator and reach out to your loan servicer for personalized guidance. By doing so, you can pave the way for a more manageable and successful student loan repayment journey.

Understanding the Onboarding Process: Navigating the Restart of Student Loan Payments

The resumption of federal student loan payments following a 3.5-year pause has introduced a unique scenario for borrowers. To comprehend this process better, let’s delve into the details:

The 3.5-Year Pause:

The 3.5-year suspension of federal student loan payments was implemented to provide relief during challenging economic times. As a result, millions of borrowers are now in a position to restart their payments. This sudden influx of borrowers into the system has led to expected wait times, with many seeking guidance on their repayment options.

A Grace Period Without Penalties:

Amidst these challenging times, there is some good news for borrowers. For the next 12 months, late, missed, or partial payments won’t result in penalties. The federal government has extended this grace period to allow borrowers ample time to get their payments sorted and find a repayment plan that suits their financial circumstances.

This grace period not only relieves immediate financial pressure but also encourages borrowers to explore available options without fear of consequences, making it a critical period for informed decision-making.

Fresh Start Program: A Way Out of Default

For borrowers who have found themselves in default on their student loans, the Fresh Start program is a lifeline. It offers a promising pathway to recover from default and regain eligibility for federal student aid.

Benefits of Fresh Start:

The Fresh Start program offers a multitude of benefits to borrowers struggling with loan default:

  1. Transition to a Regular Loan Servicer: Fresh Start allows you to move from your default loan servicer to a regular one. This transition is pivotal, as it makes you eligible for other relief options like forbearance, deferment, and income-driven repayment plans.
  2. Monthly Payment Flexibility: One of the most significant advantages is that even a monthly payment of $0 counts as a payment within these plans. This provision ensures that your loan remains manageable, even if your financial situation temporarily prevents you from making substantial payments.

Application Deadline:

Borrowers facing default have until December 31 to apply for the Fresh Start program. This program presents a golden opportunity to exit the default status, regain eligibility for federal student aid, and embark on a journey toward financial recovery. It’s essential for borrowers in default to seize this window of opportunity to secure their financial future.

The Role of Financial Aid Administrators: Your Guides to Student Loan Success

Financial aid administrators play a pivotal role in helping borrowers navigate the complexities of student loan repayments. Their commitment to assisting students extends well beyond graduation. Here’s a closer look at their responsibilities:

Exit Interviews:

When students graduate from college, financial aid offices conduct exit interviews to provide guidance on loan repayments. These interviews serve as a valuable forum for ensuring that students are well-informed about their responsibilities and options post-graduation. By imparting essential knowledge, financial aid administrators empower graduates to make informed decisions about their student loans.

Accountability of Institutions:

Accredited institutions offering Federal Pell Grants, federal student loans, and federal work-study programs have a vested interest in helping students manage their loans effectively. These institutions are held accountable for the number of borrowers who default on their student loans. Beyond altruism, institutions have a financial interest in ensuring that graduates successfully navigate their loans. This dual commitment to student success and institutional accountability drives their dedication to assisting graduates in repaying their loans.

In summary, the resumption of student loan payments following a 3.5-year pause comes with both challenges and opportunities. The grace period without penalties offers borrowers a chance to explore their repayment options, while programs like Fresh Start provide hope for those in default. Financial aid administrators continue to play a crucial role in ensuring borrowers are well-informed and supported throughout their student loan journey, extending their commitment even beyond graduation. By understanding these facets, borrowers can navigate the restart of student loan payments with greater confidence and success.


The looming restart of student loan payments need not be a cause for anxiety. By taking proactive steps today, borrowers can navigate the repayment process with confidence. Whether you opt for deferments, forbearances, income-driven repayment plans, or the Fresh Start program, there are solutions to fit your needs. Remember, financial aid administrators and online tools are valuable resources to help you make informed decisions.

Don’t delay – start managing your student loan payments today, securing a brighter financial future for yourself. In this evolving landscape of student loan management, staying informed and proactive is the key to success.


FAQs on Managing Student Loan Payments

1. FAQ: What are income-driven repayment plans, and how do they help with student loan payments?

Answer: Income-driven repayment plans, like the Saving on A Valuable Education (SAVE) plan, adjust your monthly payments based on your income and family size. They aim to make student loan payments more affordable, ensuring they remain manageable even if your income fluctuates. These plans can significantly reduce your financial burden.

2. FAQ: What’s the advantage of using the federal loan calculator on when choosing a repayment plan?

Answer: The federal loan calculator is a valuable tool for comparing different repayment plans. It allows you to input your financial details and get personalized estimates for each plan. This helps you make an informed decision about which plan best suits your financial situation.

3. FAQ: Can I apply for the Fresh Start program if I’ve defaulted on my student loans, and how does it work?

Answer: Yes, you can apply for the Fresh Start program if you’ve defaulted on your student loans. This program allows you to return to college, where financial aid administrators can help you get your accounts back in good standing. Once you’re back in school, you become eligible for forbearance, deferment, and income-driven repayment plans, even if your monthly payment is as low as $0.

4. FAQ: What is the significance of the 3.5-year pause in federal student loan payments, and how does it affect borrowers?

Answer: The 3.5-year pause in federal student loan payments is a unique situation that affects 20 million borrowers. During this time, late, missed, or partial payments won’t result in penalties for the next 12 months. This provides borrowers with extra time to navigate the repayment process without facing adverse consequences.

5. FAQ: How can financial aid administrators help me with student loan repayment even after I’ve graduated from college?

Answer: Financial aid administrators play a critical role in helping you manage your student loans successfully. They conduct exit interviews to provide guidance on loan repayments when you graduate. Accredited institutions also have a vested interest in ensuring that you navigate your loans successfully, even after you’ve left. They are accountable for the number of borrowers who default on their student loans and are committed to helping you repay them successfully.


  1. Student loans
  2. Repayment options
  3. Income-driven repayment
  4. Federal loan calculator
  5. Fresh Start program
  6. Student loan default
  7. Financial aid administrators
  8. College graduates
  9. Loan management
  10. Loan repayment strategies

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