Big Picture, Financial Planning, Millennials

How To Prepare Ahead of Time For Student Loans To Come Back

It has been about 3 months since the Biden administration extended the pause on federal student loans, however, they did make it clear that this is the last time. This means everyone will be required to start paying on their loans again on February 1, 2022. It’s crazy it has already been 2 years (almost) since borrowers were required to pay and since interest was accruing on those loans. Hopefully, during this time you used the additional cash flow to either build your financial foundation or attack the student loans while they had 0% interest. Key word, hopefully. If not, don’t make yourself feel bad. There is nothing you can change now besides the route you take moving forward.

For those that have student loans, now is the time to prepare for them to come back. You are going to take a hit on monthly cash flow and you don’t want to wait, be unprepared, and then overspend due to these payments being back. To help you prepare for these loans, I wanted to break down a few things you should start thinking about today. 

Update All Of Your Contact Info and Ensure You Know Who Your Provider Is

There are a couple main things you want to do to update all of your student loan info. 

  1. Call your student loan servicer (some changes were made here and you may need to figure out who your new provider is) and make sure all the contact info is correct. This may take multiple calls but is needed.
    1. If your loans were by Navient then are now transferred to Maximus which is now doing business as Aidvantage.
    2. If your loans were by FedLoan Servicing, they will be transferred but unsure where yet. Some will be going to MOHELA but the Department of Education has not said if all will be transferred there.
    3. Nelnet and Great Lakes have not withdrawn and have been extended at least another two years.
  2. Go to and update contact info there as well. You need to be reachable by them just in case!

Get An Idea of What Your Anticipated Payments Are

You need to go and figure out how much total debt you have, what the monthly payments are going to be, and what the interest rate is going to be. This way you can have an understanding of how this will change your monthly cash flow. If based on your current situation you don’t have enough available cash flow for this, you are going to need to figure out where you are going to do. You can either cut spending or cut saving to ensure you have the money available. Doing this a few months ahead of time is huge so you can make the required changes now instead of waiting, being short, swiping your credit card, and adding more debt in the long run. 

You may even want to start saving an amount that will be equal to the payments to get in the habit of having less to spend monthly. It’s never a bad idea to prepare early. 

Decide On Your Path Forward 

Right now, we don’t know what changes are coming to student loans when they come back. You need to stay up to date on all of this to determine what your next best steps are. If you are someone not going for loan forgiveness, you will want to see what the interest rates are on your loans when they start back up. If they are high, you will want to go look into refinancing your loans and finding a better interest rate. If you are going for loan forgiveness, you will not want to refinance since that would eliminate the ability to receive forgiveness. Your financial advisor can and should help you determine the best route to take here.

Set up automatic payments 

We are all human and easily forget to do things. Set up automatic payments so you don’t miss any months of payments. This step is really easy and can save you a bunch of headaches down the line. 

Take A Look At Your Financial Plan 

Not everyone should have the same plan around student loans. Your feelings towards debt, your risk tolerance, and your goals all make a difference on whether you should pay the minimum payment, attack the loans aggressively, or find a combination of the two. You need to create a financial plan that looks at everything holistically so you can make the best choice for you and your family. 

The key here is to have a plan and stick with it. But to be prepared for loans to come back, I urge you to take all of these steps ahead of time.

Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.