When Congress passed the CARES Act last year to help individuals stay afloat during the economic downturn, one of the provisions it included was the suspension of most federal student loan payments, starting on March 13, 2020.

The payment moratorium, which had been extended a number of times, was set to expire on September 30 this year — but earlier this month, the Department of Education announced a final extension until January 31, 2022.

So if you're one of the 42 million Americans who haven’t had to make their usual student loan payments, it’s a good idea to start easing back into the mindset of having to make those payments again. Here are the details about the suspended payments along with some ideas of how you could redirect this money to help further your financial goals.

WHICH LOANS ARE AFFECTED?

The federal student loans eligible for suspended repayment include:

  • Direct Loans
  • Federal Family Education Loan (FFEL) Program Loans owned by the Department of Education
  • Federal Perkins Loans owned by the Department of Education

However, FFEL Program Loans owned by private lenders, Perkins Loans owned by individual colleges and any private student loans don’t qualify for the suspension. If you’re not sure whether your loan qualifies, there’s no need to worry — if it did, you would have been automatically opted into the pause, with no action required on your part.

During the repayment suspension, your loans will not accrue interest. This is similar to what you would experience if you had borrowed a federally subsidized student loan and then placed it in deferment.

WHAT YOU CAN DO NOW

By the time February 2022 rolls around, it will be nearly two years since you’ve had to make your regular student loan payment. And depending on how much your payment is, that can be a difficult thing to suddenly work back into your budget. Here are a few ideas for how to start preparing your finances for the return of your student loan payment.

Determine If You Can Afford Your Old Payment

If your income was impacted during the pandemic, take some time to determine whether you think you’ll be able to start making your payment again. You may need to recalculate your budget based on your new or expected income to see if you can adequately cover all your expenses and goal contributions.

If you’re not sure whether you can swing it, you may need to start researching other options like deferment, forbearance or an income-driven repayment plan. You may even want to consider refinancing your loans if you can get a lower interest rate, although doing so would mean losing the benefits and flexibility of having a federal loan.

Set Aside Your Loan Payment Amounts Early

According to EducationData.org, the average student loan payment is $393. Even if you haven’t lost income because of the pandemic, it can be hard to start footing a nearly $400 monthly bill again. So give yourself a few months to ease back into it and get into the habit of setting aside your student loan payment amount now so you don’t spend it. You could use that money to pad your emergency fund, pay down some credit card debt or save it for holiday shopping. Not only are you preparing your budget for the repayment, but you’re also helping yourself get ahead on some financial goals.

Start Paying Your Loans Back Now

One option is that you don’t actually have to wait until February to start paying your loans back. The fact that your student loans are not accruing interest means that any payment you do make right now will go directly toward reducing your loan’s principal and help you pay your loan down faster.

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