Should I Make Student Loan Payments Before the Pause Ends?

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Expertise Personal finance | Government and Policy | Consumer affairs
Peter Butler
Dan Avery
4 min read
Woman in graduation gown looking at piggy bank

The White House says its student loan forgiveness plan will wipe out the remaining balance for more than 20 million Americans.

Tara Moore/Getty Images

What's happening

The Supreme Court is addressing two challenges to the Biden administration's student loan relief plan.

Why it matters

When the current forbearance on loan payments and interest ends depends on when the court issues its ruling.

As the Supreme Court weighs legal challenges to US President Joe Biden's student loan forgiveness plan, payments and interest for 45 million Americans with federal education loans are on pause.
Depending on when the justices issue their decision, that forbearance could end as early as June or as late as September. But, according to some financial experts, you might want to resume payments before then. 

Biden's plan only provides for $10,000 in debt forgiveness -- or $20,000 for Pell grant recipients -- and only for borrowers making less than $125,000. The average student loan debt is about $37,000, according to Federal Student Aid Data, and some 2.1 million Americans owe more than $100,000.

As of August 2022, only about 1.2% of borrowers had continued paying off their loans, according to information from the Department of Education. But if you can afford to, it's a good way to pay down your principal while no interest accrues. 

Should I make payments on my student loans during the pause?

Although payments have been paused since March 2020, you still owe the remaining balance. And interest will start accruing again when the moratorium is lifted.  

Some personal finance pros argue that anything you can direct toward your debt will save you money in the long term.

Think of this loan freeze like an introductory 0% APR on a credit card. Free financing means all of your payments go directly toward the principal, reducing the interest you'll pay once the moratorium ends.
Others don't agree. Mark Kantrowitz, a higher education expert who sits on the board of the Journal of Student Financial Aid, says most borrowers are better off putting the money in a high-yield savings account and making a lump sum payment when repayment resumes. 

Kantrowitz recommends setting aside an amount equal to your monthly loan payment now, "to get you used to making the payments."
"The money you save could be used to build or bulk-up an emergency fund, to pay down higher-interest debt like credit cards or go toward a highest-interest student loan when repayment restarts," he said.

How can I decide if I should keep making loan payments?

Whether continuing to make loan payments is the right decision for you depends on your personal financial situation. Going into another form of debt to pay off your student loans doesn't make sense.
The big question you need to answer is "How much can I afford to put toward my student loans each month?"

Kantrowitz recommends "a descriptive budgeting exercise" to get a clear picture of your finances.

The Federal Student Aid Loan Simulator can help you determine how much you should pay each month based on your loan amount, salary, goals and other factors.  

What if I'm on an income-driven repayment plan or working toward loan forgiveness?

Income-driven repayment plans allow you to make payments based on your salary. After the term of your plan -- usually 20 to 25 years -- your loan balance is forgiven.
If you were on an IDR plan before the freeze, you'll receive credit toward IDR forgiveness for each month of the payment pause. If loan forgiveness is your goal, there's not much incentive to pay during the moratorium.

If you're working toward loan forgiveness through the Public Service Loan Forgiveness or Teacher Loan Forgiveness programs, all months of the student loan moratorium will also count toward your payments required for federal loan relief.
Again, there's little benefit to making payments during this time if this is your situation.

The PSLF program cancels any remaining debt on direct student loans for qualifying public servants like teachers, firefighters, nurses, military members and government workers., if they made on-time payments for 10 years.
If you previously applied for loan forgiveness through the PSLF and were denied, you may now qualify through the expanded requirements that rolled out in October 2021

Students carrying signs that say "Cancel student debt"

Activists outside of the White House call on Biden to cancel student debt.  

Anna Moneymaker/Getty Images

How do I start making loan payments again?

Contact your loan servicer and check to make sure that all of your personal information is still accurate. If you're not sure who your loan servicer is, log onto the Federal Student Aid website and visit your dashboard.

Once you've identified your servicer, the Federal Student Aid site provides links to servicer sites.

It's worth noting that loan servicer Navient transferred all of its 5.6 million student loans to another company, Aidvantage, in late 2021. If Navient was your servicer, you should be able to log in at Aidvantage with your Navient credentials.

If you were enrolled in an income-driven repayment plan designed to establish affordable monthly payments, your enrollment should still be in place. All the months since March 2020 will count as paid toward the years you need for the loan to be forgiven.

Also, if you registered for automatic payments on your federal student loan before March 2020 and want to restart them, you'll need to opt in again.

Will the freeze on student loan payments be extended again?

In March 2020, the CARES act established the original forbearance on federal student loans and interest. President Donald Trump extended the deadline twice and Biden has postponed it six more times.

Currently, the 60-day countdown to the end of the forbearance is slated to start when the Supreme Court issues its ruling or on June 30, 2023, whichever comes first. 
It's possible the Department of Education will start the clock on the 60-day period immediately after a decision or wait until the start of the next full month. So the earliest loan payments could resume is May 2023 and the latest is September 2023.
For more on student loans, discover five ways to take control of student debt.