After a three-year pause, student loan borrowers need to start paying again. Here’s how to do it

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Seth Wenig/AP Photo
New graduates line up before the start of a community college commencement in East Rutherford, N.J., May 17, 2018.

Starting this month, nearly 800,000 Coloradans are going to have another bill, alongside their rent or mortgage, utilities, phone bill and food purchases: student loans – after a three-and-a-half-year pandemic pause.

Interest started accruing last month. A lot of rules and programs have changed. What are the options now?

CPR education reporter Jenny Brundin talked to Colorado student loan attorney Karen Cody-Hopkins and sifted through federal government sources to find some answers.

If I have a student loan, where should I start this process?

Know that you aren’t alone if you’re feeling stressed but it is important to take some steps that will help you out.

First, build a simple budget so you know how much you can set aside for a loan repayment. Update your contact information on the Department of Education’s Student Aid website. You may have a new loan servicer (the number of servicers for federal loans has been whittled, most likely to either MOHELA, Aidvantage, Nelnet or Edfinacial.) You can locate them on the department’s website. You’ll have two accounts – one with the Department of Education and one with the loan servicer.

What payment plan should I pick?

It depends. There have been some big changes from the federal government over the past several years, so familiarize yourself with the new repayment plans because circumstances in your life may have changed too.

Use the loan-simulator tool at to find out the payment plan that’s best for your situation. It tells you the plans you are eligible for, monthly payment, how much you’ll pay out of pocket over time and whether you qualify for a forgiveness program.

Help! I can’t get through to my loan service provider.

Servicers are inundated right now. They are severely short-staffed and dealing with 40 million borrowers. Don’t panic, “because with the on-ramp, nothing's going to happen,” said Cody-Hopkins. You need to start repaying your loans but until September 2024, the federal government won’t penalize you if you can't. She said don’t spend a lot of time on the phone trying to get through for the next couple of weeks. Spend that time educating yourself on, look through their dropdown menus to go deeper. But don’t put the call off for months and months.

“You have to become educated about your student loans to manage them, because they will last either until they're paid off or until you die,” she said, unless they are forgiven (see below.)

If I have high federal student loans compared to my income, will I qualify for an income driven repayment plan?

It’s likely you would qualify for such a plan that allows you to pay a monthly amount based on your income and family size, as well as your budget. It’s typically a percent of your discretionary income. You have to fill out an application.

The newest plan is called SAVE, formerly called REPAYE. 

What’s different about the new SAVE plan? Will it help me pay less per month?

Experts say there are multiple benefits to this plan. It increases the income exemption from 150 percent to 225 percent of the poverty line. Your monthly payment amount is based on your discretionary income – the difference between your adjusted gross income and 225 percent of the federal poverty guidelines. That means you won’t owe loan payments if you are a single borrower who makes less than $15 an hour or are a family of four earning $67,550 or less. If you earn more than this, you’ll save at least $1,000 a year compared to other income driven repayment plans, according to the federal government.

What if I miss a payment?

Part of the Department of Education’s “on-ramp” plan allows borrowers to miss monthly payments without harsh penalties until September 2024. Borrowers won’t be put in delinquent status or have their wages garnished but interest will still accrue so you’ll owe more money, which some experts say could affect your credit score slightly.

After the on-ramp expires, if you qualify for deferment or forbearance, where you don’t have to make a payment or you can temporarily make a smaller payment, interest still accrues and you likely won’t be making progress toward paying back your loan or forgiveness.

What if I defaulted on my loan before the pandemic?

If you defaulted on your loan (behind 270 days or more on payments) before the payment pause, you get a fresh start and can enroll in repayment plans.  But there are steps you need to take first before you can get your loan server to clear your default record from your credit report. Cody-Hopkins said try every possibility before defaulting, such as forbearance or deferment.

What is the best strategy for paying off several loans, paying the smallest loan amount or the loan with the highest interest rate?

Cody-Hopkins says look into consolidating loans. There is no fee to consolidate. Right now, through the end of the year, if you consolidate, the department will give you credit toward income driven loan forgiveness, going back to your oldest loan. Some borrowers in an income-driven repayment plan may be eligible to cancel their debt after 20 to 25 years or if they’ve been defrauded or deceived by a for-profit college.

How do I know if I qualify for loan forgiveness?

The Biden Administration has already forgiven $117 billion in student loans for more than 3.4 million borrowers. Cody-Hopkins said every two months the federal government is now checking to see if people are past the 20 years (undergraduate loans) 25 years (graduate loans) to qualify for forgiveness. Last year the government announced a number of fixes to move millions of borrowers closer to loan forgiveness, including the audits. Cody-Hopkins has had more than $3 million of her client’s loans forgiven under the audits.

I’ve heard that some people can have their student loans forgiven after 10 years?

The Public Service Loan Forgiveness program had a lot of problems for many years, but it’s back on track and still in operation. If you have federal student loans and you are a teacher, librarian, nurse, first responder or work for a non-profit or are another public worker, you may have what remains of your debt canceled after 10 years of public interest work or 120 monthly payments. Until you’ve hit the 10-year mark, you’ll want to make the lowest monthly payments possible. You don’t have to be working at a qualifying place for consecutive years, but just have to have 120 total monthly payments while at a qualifying employer.

I’m 60 years old and I still have student loans. Is that normal?

Fewer than 2 percent of borrowers nationally continued making payments on their student loans during the pause on interest accrual and the fastest growing group of borrowers (people still struggling with debt) are people 62 and older. Cody-Hopkins said she sees people from all walks of life and ages. A big group are people saddled with loan debt who are now wondering whether they should take out Parent Plus loans for their children.

“Oftentimes the people in their 50s, 60s, and 70s, are the most stressed people I see because they're being squeezed,” she said.

Parent Plus borrowers are not eligible for the SAVE plan. She counsels people not to consolidate Parent Plus loans with any other types of loans because they are their own beast.

How often should I reevaluate my payment plan?

Income-driven plans need to be “recertified” or checked each year to make sure the required monthly payment amount is right for your income and family size. But if your income goes down, you’re allowed to ask for a recalculation.