Student Loans

Federal Student Loan Relief Scheduled to End

January 15, 2021
by Team SESLOC

Update August 18, 2021 — On August 6, 2021, the U.S. Department of Education announced an extension of the pause on federal student loan payments to January 31, 2022. The payment moratorium, currently in effect for millions of federal student loan borrowers, was set to end on September 30, 2021.

Update January 20, 2021 — President Biden signed an Executive Order directing the Department of Education to extend the suspension of student loan payments until September 30, 2021. Those with student loans can start planning for the October 1, 2021 resumption of payments. Learn more below:

Update January 19, 2021 — The incoming Biden administration has announced an intention to further extend student loan relief. A new date has not been announced yet, but this article will be updated when more information is available. Check out the tips below so you can plan in advance for loan repayment resumption:

Federal Student Loan Payment Deferral through the CARES Act is scheduled to end on January 31, 2021. This relief included suspended loan payments, 0% interest rates for federal student loans, and a collections moratorium on defaulted loans.

Although student loan relief has twice been extended due to the ongoing COVID crisis, additional extensions are uncertain. Those with federal student loans should be prepared for the January 31 deadline.

Check In With Your Loan Servicer

This is a good time to check in with your loan servicer to ensure you’re on a payment plan that fits your situation. Our partners at GreenPath recommend you do this soon; when loan payments resume, the government will be activating 30 million borrowers at one time, and you may find it difficult to reach your loan servicer.

Are Your Loans On Auto-Pay?

If you set your student loans to auto-pay, you can expect servicers to automatically reactivate that function on [update: October 1]. Check your settings to ensure you know when a payment might go through, as well as from which account, so you avoid a surprise overdraft.

Estimate Your Loan Repayment

Try the Department of Education’s Loan Simulator tool to cast a loan payment estimate and compare different payment plans. The tool allows you to input  factors unique to your situation, as well as your goal — like paying off your loan as fast as possible or by a certain date.

What’s the Difference Between Payment Plans?

There are several different loan repayment plans, and eligibility is based on factors like loan type and financial status. Learn more and see the eligibility requirements at

  • Standard Repayment Plan — Fixed payments to pay off your loan within 10 years.
  • Graduated Repayment Plan — Payments start low then incrementally increase to pay off your loan within 10 years.
  • Extended Repayment Plan — Fixed of graduated payments to pay off our loan within 25 years.
  • Pay as You Earn Repayment Plan (PAYE) — Payments are 10% if your discretionary income but not more than the payment calculated for a Standard Repayment Plan, paid within 20 years.
  • Revised Pay as You Earn Repayment Plan (REPAYE) — Payments are 10% of your discretionary income and are recalculated each year based on your income and family status. If undergraduate loans are not paid off within 20 years, or graduate loans within 25, the outstanding balance will be forgiven.
  • Income-Based Repayment Plan (IBR) — Payments are 10% or 15% of your discretionary income and are recalculated each year based on your income and family status. If the loan is not paid in full after 20 or 25 years (depending on when you received the loan), the outstanding balance will be forgiven (may be subject to taxes).
  • Income-Contingent Repayment Plan (ICR) — Monthly payment is the lesser of 20% of discretionary income or a fixed payment calculated on a 12 year term, adjusted for income. The outstanding balance will be forgiven if not paid after 25 years.
  • Income-Sensitive Repayment Plan — Monthly payment based on annual income, paid within 15 years.

What Can I Do If I Still Need Help?

SESLOC is committed to providing resources to help you take control of your financial health. Our partners at GreenPath Financial Wellness can help with hands-on student loan assistance. GreenPath’s certified student loan experts will review your situation, help you understand the options available to you, and develop a customized plan for managing your bills.

GreenPath also offers an enhanced support program* if you’re in default or having trouble with your servicer. In this program, GreenPath’s counselors will develop a plan to bring your loans current, assist you with repayment applications, and contact your servicers to advocate on your behalf.

*A small fee for GreenPath’s enhanced programs applies, but calling for a general consultation is always free. Contact GreenPath today to get started.





Share this post

Like this post