ARIZONA, USA — The pause on student loan payments has been extended again.
For months, borrowers have been budgeting to pay that dreaded bill again starting Feb. 1 but the Biden administration has pushed the moratorium until May 1, 2022.
Mary Jo Lambert-Terry, the Managing Partner at Yrefy in Arizona, said there are several reasons behind the extension.
"Part of it is the pandemic, but also changes of servicers," Terry said. "So during the pandemic we had federal loan servicers drop out and then we’ve had new ones come back in, so they want to make sure everyone's account is up and running in the correct way."
Terry said May is only a few months away, so now is the time to prepare.
"Two years is a significant amount of time, that's how much time it's been since many made a student loan payment, this is going to have an impact on your household and budgeting for this bill again is going to be hard."
Terry said start simple by updating your contact information.
"So go to studentaid.gov, update your profile because a lot of people have changed addresses, phone numbers and emails," she explained. "Also look to see who your loan servicer is because your loan servicer may have changed. Knowing who to make payments to is obviously pretty important."
She said if you can, start paying down on your principal balance up until May even though there's been an extension.
"So during the pandemic no interest has been accruing in your loan which is great news and it's also given people a break who’ve been unemployed or have had life happen," she continued. "If you choose, you can make payments right now up until the May 2022 deadline and no interest is accruing so every payment you make is coming off the principal balance which is great."
She said skip the coffee or eating out, putting aside as little as $25 each month until May can make a big difference.
"The key thing is you can put $25 in on your student loans, it does make a difference getting that principal balance paid down even a tiny bit and there's no prepayment penalties on these loans so when it does go into repayment if you can continue to send the little bit of extra money it will get your loans paid off much faster."
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