Assume that you will have to make payments starting in May, even if you still have doubts that payments will resume.
While many were enjoying the holidays, the moratorium on Federal Student Loan payments has been extended again until May 1, 2022. This is yet another extension in the long timeline of Student Loan Pause Extension (this one being the last one under the Biden Administration) bringing the total amount of time that payments have been paused to over 2 full years.
You have had your Federal Student Loans at zero percent interest and with no required payments since the CARES Act put all of this into place in March 2020, you have now been granted an additional 90 days of no payments or interest accumulation. No more repayment, no more due dates, just room to breathe.
The government extended your repayment pause because of new waves of COVID-19 have once again disrupted people’s lives and their ability to work. To have started payments again while the number of people that are getting sick is continuing to climb daily would result in more confusion than necessary. Don’t think of this extended break from payments as free time to ignore your student loans.
Typically, the IRS will begin processing tax returns early February, which means if you get your return in early February, you can expect to receive your refund quicker than if you waited until the April deadline. If you plan on using your tax refund as extra cash to make your student loan payments after 3 years of being in forbearance, you may want to consider filing early because of the risk of refund delays and because you do not want to have your student loan payment and tax bills come due almost simultaneously.
On the other hand, if you are going to owe taxes, procrastinating could mean you have to pay a large tax bill and then have your student loan payment due soon after. That’s a lot of stress one person shouldn’t have deal with.
Second, incorporate your loan payments into your monthly budget now.
Even though you do not have to start repaying, if you start budgeting your payments, this will give you an idea of how to budget for future payments. If you find yourself not able to adjust your budget comfortably for the payments, you can still make adjustments before you have to start making payments.
Your budget is not a restriction, a budget provides clarity. Understanding ahead of time what will happen to your money will eliminate any confusion at the end.
Lastly, make a genuine plan for your student loan repayment.
You can’t just say, “I’ll take care of that someday.” Create a meaningful plan.
You will want to make a list of every student loan you have with the balance owed, the interest rate, the servicer and the minimum payment for each loan.
You’ll also want to choose a repayment method: Either the debt snowball method (for immediate psychological victories) or the debt avalanche method (to save on cumulative interest). Either way, you will be able to plan effectively with a written strategy in place.
The Break Has Done Good for You and Others. period. Nonetheless, This is a Temporary Situation, Payments Will Start Again, So Now Is the Time To Focus On Your Long-Term Goals of Either Paying Off This Debt Or Placing Yourself In A Position To Get A Discharge If You Are Eligible To Do So.
Question Instead Of “Will They Extend Again?” you should ask yourself, “If We Have To Resume Payments In May, Am I Going To Be Prepared?”
If your answer is Yes And Then You Are In Control . however, if your Answer Is No, Luckily, You Still Have Time To Make Changes.
Find Out How To Make Your Most Of This Additional 90 Days. You Will Thank Your Present Self!
