The Return of Student Loan Collections: How to Prepare

Start Preparing for Student Loan Payments!

After more than three years of pause, federal student loan payments in the United States have resumed.

But here’s the good news: with planning and organization, it’s absolutely possible to face this new phase with more confidence and security.

What happened during the pause?

Back in 2020, at the beginning of the pandemic, the federal government temporarily suspended payments and interest on federal student loans as part of the CARES Act.

This pause was extended several times until, in 2023, with the debt ceiling agreement passed by Congress, it was officially decided that payments would resume in October of that year.

And what about loan forgiveness?

President Joe Biden proposed a broad student loan forgiveness plan that would have benefited millions of borrowers. However, the Supreme Court blocked the proposal in mid-2023.
Starting in 2025, students will need to resume making payments on their student loans.

How to Prepare for the Return of Payments?

If the bills have already started arriving — or are about to —don’t panic. You can take these practical steps to get organized:

1. Check the status of your loan

Visit the StudentAid.gov website to check:

• The amount and type of loan you have;
• Who your loan servicer is (some accounts were transferred to other companies during the pause).

Knowing exactly where you stand is essential to planning your next steps.

2. Update your contact information

Make sure your contact details — address, phone number, and email — are up to date both on the government’s site and with your loan servicer.

This way, you won’t miss important communications about due dates, payment amounts, or any changes to your loan.

3. Review your budget

Now is the time to get your finances in order. With payments resuming, it’s essential to know how much you earn, how much you spend, and how much you can set aside each month for your loan payment.
Simple tools like spreadsheets or finance apps can be very helpful.

What Are the Payment Options?

Income-Driven Repayment (IDR) Plans

IDR plans adjust your monthly payment based on your income and family size.

The new SAVE plan, for example, can significantly reduce your monthly payment — and even lead to loan forgiveness after a certain period.

Loan Consolidation: Simplify Your Life

If you have multiple federal loans, you can consolidate them into one. This makes repayment easier, since you’ll only have one monthly bill to manage.

Refinancing: Be Cautious!

Refinancing through a private lender might lower your interest rate, but be careful: you’ll lose access to federal loan benefits, such as IDR plans and deferment options.

It’s a decision that should be made with caution.

Deferment or Forbearance: When Things Get Tight

If you’re going through financial hardship, you may qualify for a temporary deferment or forbearance.

But beware: in many cases, interest keeps accruing during these pauses. Use these options wisely and sparingly.

Watch Out for Scams!

With payments resuming, scammers are also back in action. Some companies promise “guaranteed forgiveness” in exchange for high fees — these are almost always scams.

Remember: the federal government never charges you to enroll in repayment or forgiveness programs. Be skeptical of strange messages, shady links, or miracle promises.

Always look for information directly from official sources like StudentAid.gov.

What if I just ignore the debt?

Ignoring your student loans can lead to serious consequences, such as:

• Damage to your credit score;
• Loss of federal benefits;
• Interest accumulation and debt collection;
• Even garnishment of your tax refund.

Student debt doesn’t just disappear. But it can be managed — and it all starts with action and planning.

Long-Term Tips

Getting back on track with student loan payments takes some adjustment, but a few small changes can go a long way:

• Enable autopay: Many servicers offer a small interest rate discount (usually 0.25%) when you sign up for automatic payments.
• Build an emergency fund: Even a small savings cushion can help you avoid missing a payment when things get tight.
• Use forgiveness programs: If you work in the public sector or for a qualifying nonprofit, look into Public Service Loan Forgiveness (PSLF) and similar programs.

Written by

Gabriel Gonçalves