Budgeting / Student Loans / Refinancing

How to Prepare to Pay Your Federal Student Loans Again

Words by Abbie Dyer on Sep 12, 2023 10:21:51 AM

The wait on the fate of federal student loan balances is over and now millions of borrowers need to prepare to make payments again as soon as October 2023. Interest and payments on federal student loans were paused in March 2020 in response to the pandemic. Now three and a half years later, many people are concerned about how they’ll resume their payments. But knowing your options and creating a plan can help ease stress and provide peace of mind during this tumultuous time.

Adding new family members, a change in job or marital status, medical issues, and more can have a big impact on your household budget. Not to mention that record-high inflation has made many household costs more expensive than they were before the pandemic. Regardless, all of these changes call for a change in your budget.

It’s understandable that your life and needs change over time, but another cause for concern is many people took on additional debt payments during the student loan pause. According to a recent study by TransUnion, 53 percent of student loan borrowers opened a new credit card since the beginning of the pandemic, 36 percent of borrowers got an auto loan, and 15 percent got a mortgage.1 With this increased debt, many borrowers are now responsible for more payments than they were before the pandemic. And they may have forgotten to factor their looming student loan payments into their budgets.

So, is there hope for tackling your student loans? Absolutely. It’s time to make a plan.

Review Your Loans

During the federal student loan payment pause, your student loan servicer may have changed. If you’re not sure who your current loan servicer is, visit the Federal Student Aid website at www.studentaid.gov and log in to your account.2 In your account, you’ll be able to see your loan details.

If you already know which company services your loan, log in to your account and make sure your contact information is up to date. If you have an automatic payment set up on your loan, review your payment information as well. In your account, you should be able to find information about when your next payment is due and the amount of your payment.

Make a Budget

If you’ve never made a household budget, now is the time to start. Keeping track of where your money is going each month can help you visually see your biggest spending categories. Tracking your income and spending makes it easier to find ways to cut back, save more, adjust your spending, and work toward your goals.

Budgeting can also help reduce stress around your finances. If you plan out where your money is going each month and review your upcoming payments, you’ll know exactly when and how much money is coming out of your account, leaving less room for surprises.

Get started on your budget today by checking out our blog post on how to create (and keep) a budget. Or download our budgeting worksheet and start customizing the categories based on your lifestyle.

Consider a Loan Refinance

Refinancing your student loans3 could lower your monthly payment or reduce the term of your loans (the amount of time you’re scheduled to make loan payments). If you have a few loans with different lenders, refinancing can also help you consolidate your student loans into one easy monthly payment.4 Just keep in mind that if you plan to refinance federal student loans with a private lender, you’ll lose access to any current and/or future federal student loan benefits, such as potential debt cancelation or income-driven repayment options.

 Check out the student loan refinance calculator3 from our partner at Student Choice to get an idea of how your loan payment could change with a refinance.

Review Repayment Plans 

The Federal Student Aid website3 has a loan simulator tool that can help you determine the best strategy to repay your federal student loans. They also offer options on what to do if you’re struggling to make your payments. On this site, you can find information about Income-Driven Repayment (IDR) Plans, where you could qualify for a lower monthly payment based on your income and family size.

You can also contact your specific federal student loan servicer to see what repayment options and plans they have in place. Some lenders also offer discounts if you set your loan payments on autopay.

Resources to Help

Through our partnership with Student Choice, you can speak with a college counselor who can help review your repayment and refinancing options. Visit the Student Choice website3 to schedule an appointment with a college counselor today.

If you need help creating a debt management plan, our partners at GreenPath™ Financial Wellness3 offer financial counseling services. They can also help you access educational resources to help you get your finances back on track.

Remember our team is always here to help you if you’re having trouble making other loan payments at Lake Trust. Just give us a call at 888.267.7200, visit any Lake Trust branch, or start a secure chat by logging in to Online Banking. Your financial wellbeing matters to us. And we’re here to support you on the road to success.

SEE ALSO: Should You Refinance Your Student Loans | 9+ Practical Tips to Adjust Your Budget For Inflation


1TransUnion. (2023, 13 July). With 27 Million Set to Resume Payments, Many Student Loan Borrowers Are Already Managing Increased Debt Since Pre-Pandemic. Retrieved from https://newsroom.transunion.com/student-loan-payments-resume/


2CU Student Choice. (2023, June 30). Federal Student Loan Payments Resume Soon – What You Need to Know. Retrieved from https://www.studentchoice.org/federal-student-loan-payments-resume-soon/


3Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third-party websites. In addition, the site's privacy policies may differ from those of Lake Trust.


4IMPORTANT NOTICE: Federal loans offer certain benefits and protections that do not transfer to a private loan. If you refinance some or all of your federal student loans into a private student loan with a credit union, you will lose access to any current and/or future federal student loan benefits, such as potential debt cancellation or income-driven repayment options. With the latest announcement from the Biden administration, it’s more important than ever to evaluate your options if you have federal student loans so that you can make educated decisions. Make sure to explore all available resources by visiting the Department of Education’s website at www.studentaid.gov or contacting your federal student loan servicer to understand how any federal student loan proposals may impact you, so that you can determine if having access to federal student loan benefits outweigh the benefits of refinancing your loans. All loans subject to credit qualification and additional criteria, including graduating from an approved school. You may qualify for a Federal Direct Consolidation Loan. For additional information about a consolidation option for federal loans, contact the Department of Education at http://studentloans.gov/.3 See Important Disclosures | Lake Trust CU3 for more details.


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