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Federal student loan repayments paused during the height of COVID. As of this writing, repayments are set to resume in October 2023. By preparing for what comes next, you can take actionable steps to make repayment more manageable. Here are a few recommendations on how to prepare for what’s ahead.

Know Your Loans and Their Details

During the pause on student loan repayments, several companies that managed these debts on the government’s behalf, known as “loan servicers,” stopped doing so. As a result, you should anticipate that the servicer you were using a few years before may have changed.

Verify your current loan servicer by visiting the StudentAid.gov website. Be sure to update your contact information on the website to get important updates from them. This will also be a good opportunity to get set up with your new loan servicer, if applicable.

When the pause ends, your servicer will send you a billing statement with the required payment amount, upcoming interest, and due date. Rather than waiting for a surprise in your mailbox, it is best to have that information ahead of time so you can adjust your budget accordingly. Log in to your servicer’s website (or call their customer support line) for an estimate.

Think About Your Repayment Options

The height of COVID changed many people’s lives. It is understandable if your situation has changed over these past few years, too. For instance, the repayment plan for your loans before then might not fit your current circumstances. Now is a good time to consider switching repayment plans.

Depending on your federal loans, you may be eligible to switch to certain repayment plans. Each option has different monthly payments and characteristics, and one may have more advantages for you than the others.

The federal government hosts a Loan Simulator that you can use to explore your options. It may provide insights into how much you might pay, depending on which plan you pick. Remember that these simulations may not completely represent your financial situation. Rather, treat them as general estimates so you have ideas about restructuring your budget going forward.

Be Vigilant Against Scams

Scammers might be emboldened to prey on others whose lives have been disrupted by changes to student loan repayments. Know how to spot a scam so you can protect your identity and finances.

Remember: if an offer sounds too good to be true, it probably is. People claiming that they can erase your debt or forgive the entirety of your loan should be treated with caution. Currently, the only way to qualify for student loan forgiveness is through very specific circumstances, as defined by the Department of Education.

Never do business with someone claiming to provide loan assistance as a paid service. Anyone asking for money upfront is most likely a scammer. Your loan servicer can help discuss your best options, such as switching repayment plans or loan consolidation, and these consultations are free.

Above all, protect your information. Giving your financial information or FSA ID credentials to a scammer is opening the door to fraud or giving up control over your finances. Your loan servicer and the Department of Education will never ask for your password. Do not be intimidated by scammers pretending to be in positions of power. They can’t do anything if you give them nothing.

While the future may feel outside our control, help is always accessible. Your financial institution, loan servicer, and the federal student aid website are good starting points for more information. Next week, we will talk about the practical saving strategies you can use to prepare for the resumption of student loan payments.