Student Loan Payment Pause Ends, Payments Start in October

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Student Loan Payment Pause Ends, Payments Start in October

legal gavel on a table
Photo credit: Image by 2541163 from Pixabay

The recently passed debt ceiling bill triggered into motion the end of more than three years of federal student loan payment pauses due to Covid. The bill would also prevent the White House from issuing more payment pause extensions.

What to Look Out For

Here are 2 important things to look out for:

  1. Supreme Court ruling on student debt relief towards the end of June
  2. Payments resume on federal student loans in October

The Biden Administration issued a student loan debt relief of up to $20,000 for certain borrowers (Pell grant recipients). However, this plan has been legally challenged and is currently tied up in the Supreme Court. A decision is due by the end of this month and signs from the conservative leaning court have been pointing to a ruling against this plan. Be on the lookout in the news for the decision at the end of June.

The Department of Education recently made it known that student loan interest will resume, starting September 1. The Federal Student Aid website also states that payments will also resume, starting in October.

So, what do I do now?

Here are 4 things to do before payments resume:

  1. If you haven't done so, start budgeting! Try AlumSum's Monthly Budget Template to get you on the right budgeting track.
  2. Some federal servicers have switched during the pandemic. Find out which servicers are servicing your loans and make sure you’re getting notified with their communications.
  3. If your income isn’t sufficient enough to cover your loan payments once they restart, you may be eligible for an Income-Driven Repayment (IDR) Plan. You can apply now and self-certify by reporting your income. 
  4. Create an AlumSum account to help you manage all your student loans in one place.
Illustration of stressed woman sitting at laptop with hands over face
Photo credit: Image by HtcHnm from Pixabay

Budgeting is crucial to understanding how much money is coming in and going out monthly. It gives you insight into what expenses you have and how much you’re paying for those monthly expenses. Budgeting can also help you be more disciplined in your spending. Perhaps there are subscriptions you no longer use but are still paying for. Maybe your budget shows you’re eating out way too much and need to reign in your restaurant spending. Creating a budget and sticking to it will help tremendously on planning for when those loan payments resume in October.

During the pandemic, several loan servicers that handled federal student loans have stopped servicing them. Servicers like Navient, FedLoan and Granite State have all stopped servicing loans and potentially millions of borrowers will have a different servicer by the time repayment begins. You should have already been receiving email notifications about your new loan servicer. If not, go to, log in and find out who your new loan servicer is.

Graduate cap sitting on a pile of money
Photo credit: Image by QuinceCreative from Pixabay

If you’re struggling financially and can anticipate not being able to make the loan payments, you may be eligible for an Income-Driven Repayment (IDR) Plan. An IDR plan can reduce your monthly student loan payment to an amount that’s more affordable for you, based on income and family size. There are four income-driven repayment plans and your monthly payment will be based on a percentage of your discretionary income. You’ll have to apply for an IDR plan, so if this is a route you need to take, please go to the link below for more info:

Lastly, this is the perfect time to sign up for your own AlumSum account. If you have multiple student loans from more than one loan servicer, you’ll find our student loan management platform an absolute must to keep track of all your loans in one place. Our easy-to-understand dashboard helps you to make wiser financial decisions to get out of student debt faster while saving money on interest. Let’s get you to that next major financial goal sooner!


AlumSum is on a mission to be the best student loan management tool you need to stay on top of all your student loans and save you time and money on paying them down. Please join our email list here to become one of our first users. When you sign up you will also get a link to a sample Google Sheet Budget that’s based on my own personal monthly budget. You can copy and save the sample, then change the categories of expenses to better suit your situation. If you’ve never budgeted before, it’s a great first step on seeing where your money is going.

Thanks for reading and stay tuned,

James Y Kim

Founder of AlumSum

Disclosure: Opinions, recommendations and analysis provided in this article are those, solely of the author’s and have not been reviewed, approved or endorsed by any financial institution. The contents of this article are also not provided or commissioned by any financial institution.

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