Financial Friday Newsletter

Anyone who currently holds federal student loans should be preparing for payments to restart in October — especially those who graduated between December 2019 and May 2023. There will be no additional extensions. It’s important to be prepared so you aren’t surprised in October when your bill arrives.

Generally, federal student loans provide borrowers a six-month grace period after graduation, leaving school, or dropping below halftime enrollment status before repayment begins. The grace period gives you time to get ready for the repayment process by taking the following steps. Graduates who should have entered repayment during the COVID-19 payment pause will not receive an extended grace period once repayment begins, so consider taking these steps now:

Update your contact information: First, it’s important that you share any changes in your name, email, address or phone number with the Department of Education, so you don’t miss vital information that could impact your finances. You can update your personal data, as well as find out who will be servicing your loans, by visiting StudentAid.gov.

Estimate the payment: Estimate your loan payment and select a payment plan that works for you. Use the loan simulator tool at StudentAid.gov to review your loan balance and choose from several different repayment plans to find the one that best fits your long-term goals. Getting your application in for a new plan now is a smart way to ensure you’re ready with a payment you can afford when the time comes.

Build it into your budget: Now that you’ve estimated your monthly payment and applied for a repayment plan, create a budget that includes your loan payment so you’ll be ready when it actually comes due. If you’re not sure how to set up a spending plan, check out the interactive budget calculator and other helpful resources at OklahomaMoneyMatters.org.

Stash those dollars: Once your budget is updated to reflect your estimated monthly loan payment, consider using your grace period to build an emergency fund. Until it’s actually time to start the repayment process, consider putting that payment amount in savings every month to cover emergencies like a flat tire or medical bill.

Get familiar with your servicer: There have been several changes in companies who are servicing federal student loans since the pause began. It’s important to verify that your servicer hasn’t changed, but if it has, you should get familiar with your new company. Remember, if you won’t be able to make your payment when the pause ends, talk to your servicer now BEFORE it becomes due. They have options to help you stay on track when repayment is difficult.

Confirm your autopay: Last but certainly not least, if you were repaying your loans on autopay before the payment pause began, confirm that your autopay is still in place with your accurate bank account information.

For more resources to help you in your student loan repayment journey, visit our friends at ReadySetRepay.org