Most federal student loan borrowers have had their payments paused since March 2020 due to the COVID-19 emergency. That payment pause will end on Jan. 31, 2022. This means student loan borrowers will have to start making payments after this date.

The transition back to paying student loans may be challenging or confusing for some. But the Department of Education is offering tips to help make it as easy as possible.

If you are a student loan borrower, you can prepare by doing the following:

• Update your contact info with your loan servicer and at gov.
• Review your auto-debit enrollment or sign up for auto-debit for the first time. If you use auto-debit, you could get a 0.25% interest rate reduction on their loans.
• Use Loan Simulator to make sure you are on the best repayment plan, especially if your financial situation has changed.
• Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your monthly payment more affordable. Plus, if all your loans are Direct Loans, you can now self-report your income when applying for or recertifying an IDR plan.
• Review the requirements for loan forgiveness programs, including the recent big changes to Public Service Loan Forgiveness (PSLF). While many changes will be automatic, some borrowers will need to take steps. Learn more about these PSLF changes at gov/pslfwaiver.

Go to StudentAid.gov/coronavirus to find the most up-to-date information about student loan payments restarting. You can also read about 6 Ways to Prepare for Student Loan Repayment to Begin Again.

The U.S. Department of Education wants to help all student loan borrowers successfully restart their loan payments and have the support and resources they need to do so.

If you have questions or concerns about your student loans, please contact your federal student loan servicer for free help.

• The Department of Education’s website is a great information source for student loans.
• There are two types of student loans: federal student loans and private student loans. Other sources of financial assistance are federal grants and work-study.
• Most student loans are federal student loans and are always recommended before the use of private student loans because they offer flexible repayment options and fixed interest rates.
• Federal Student Loans:
  • In order to apply for financial assistance for your education, there are a few things you will need first:
    • A FSA ID: A Federal Student Aid ID to access the Financial Aid online systems. The FSA ID also acts as your electronic signature when completing an application.
    • A FAFSA: Free Application for Federal Student Aid.
    • It is important you review the Federal Student Aid website to learn more about eligibility requirements, estimates of aid, and funding your education.
    • The FAFSA will also help you to determine if you qualify for grants or work-study, before you take out any loans. Grants do not have to be repaid to the government, so it is always wise to accept grant money before a loan.
  • Federal loans offer lower, fixed interest rates that are favorable to private loans.
  • There are many different programs available to help you repay a federal student loan. Many of these programs offer flexible repayment or income-based repayment options. The U.S. Department of Education provides information about these programs.
• Defaulting on a Federal Student Loan:
  • When a student loan payment is delinquent for more than 270 days, the loan goes into “default.”
  • A loan with a “default” status may have serious legal consequences plus loss of eligibility for future federal student aid.
  • The federal government has extraordinary powers to collect student loans if you default.
    • These powers include tax refund offsets and federal benefits offsets, and have no time limit.
  • Private Student Loans:
    • Private student loans are made available through banks and other financial institutions that lend money without any financial backing from the federal government.
    • There are no interest rate limits on private loans. These interest rates may end up being very high and cost the borrower much more in the long term.
    • A private loan will also require a good credit score to avoid high interest rates.
    • Most private loans do not offer the same range of flexible repayment plans and other borrower protections that government loans offer.

• A potential scam to avoid is paying money for any service that offers to help you complete a financial aid application or offers financial aid advice for a fee.
• These services can cost a lot of money and are not necessary because there are many free resources available to help you with financial aid processes and information.
• You should never have to pay for financial aid assistance. You may get help finding money for college, completing a FAFSA form, or getting help with your student loans for free through a college financial aid office, official websites, or the Federal Student Aid Information Center.
• Another potential danger is identity theft. If you suspect your student information has been stolen, there are several steps you may take to report the activity.
  • Check your credit report through an official Credit Bureau (Equifax or TransUnion)
  • Report to the U.S. Department of Education’s Office of Inspector General Fraud Hotline
  • Check with the Social Security Administration.
  • Utilize the Federal Trade Commission’s Identity Theft Recovery Plan.

• For-profit colleges are managed and governed by private organizations and corporations.
• Problems that consumers sometimes encounter with for-profit colleges include inflated or misleading job placement rates, manipulation of student grades, and attendance records and illegal recruitment practices.
• Consumers who are misled during the enrollment process and finance their education using federal student loans may be eligible for loan forgiveness programs.