Student Loan Payment Preparation: Tips for Taking on Additional Expenses
Published on 3/25/2022
Re-evaluate Your Budget
In the wake of the pandemic, many of us have altered our spending and saving habits. Over the past two years, borrowers that had previously budgeted for student loan payments began using the allotted money for other expenses. With the federal forbearance coming to an end, reassessing your budget is a crucial step in preparing for the added monthly payment.
First, review your current budget and determine the areas that you would feasibly be able to minimize your spending in. Second, create a new financial plan with student loan payments implemented. This will guarantee that the added payment fits into your budget, while still allowing you to live within your means. One of the best methods to do this is by reviewing your bank statements over the past few weeks or months and determining what your spending looks like. Once you have an idea of how student loan payments will fit into your budget, establish those spending habits immediately. The sooner you are able to acclimate yourself to a new budget, the easier the transition will be when those payments do officially begin.
Once you have restructured your budget and confirmed that taking on student loan payments is financially possible, you must then consider any modifications needed to guarantee a smooth transition.
- Confirm your remaining loan balance and monthly payment amount by visiting the Federal Student Aid website.
- Make sure you know which loan servicer you will be reporting to. Many of our career paths have changed over the past two years, and that includes loan servicers, so there is a chance you may be assigned to a different agency as payments start again. To find out this information, visit the Federal Student Aid website.
- Change your address if needed. If you have moved since March 2020, log on to the Federal Student Aid website to make any necessary address changes.
As financial patterns change, in turn, so do your financial needs. When payments begin again, re-evaluate how your current payment plan fits into your budget compared to other options. Depending on your financial situation, you may realize that a switch in payment plans would better suit your current financial status. To find out about the many different options, speak with your loan servicer prior to the student loan resumption date.
Additionally, borrowers also have the option to apply for student loan forgiveness through the Public Service Loan Forgiveness program. Under this program, applicants who are accepted have the opportunity to discharge their loans after 10 years. To find out about the requirements needed in order to apply, visit finaid.org/loans/publicservice.