How to Prepare to Resume Student Loan Payments

young woman student with laptop

Recently the Biden Administration extended student loan forbearance one final time through the end of 2022. That means you’ll get a statement toward the end of the year from your student loan service provider about resuming payments on January 1, 2023. However, according to a survey by Morning Consult, nearly 3 in 5 Americans say they will not be able to resume payments when January comes. 

To hear this as a podcast, click the player below:

girl at computer biting pencil
This page may contain affiliate links. If you click on a link and purchase, we may receive a commission at no additional cost to you. Please see the site disclaimer for more information.

While calls mount for the universal cancellation of all student debt, the administration did announce at the end of August a measure that would cancel $10,000 or $20,000 in loans, depending on whether or not the student also received Pell Grants. 

Since payments have been on pause since the beginning of the pandemic in 2020, many people have lost or changed jobs, and their financial futures aren’t as sure as they were 3 years ago. How can you prepare your budget for the resumption of payments?

Start Budgeting Now

One of the first and best things you can do now is to start and maintain a budget. It doesn’t have to be complicated, but you need to know where your money is going and how much you have to apply to debt. Many things happened with your money in the past three years, and creating a budget is the best way to handle your true financial expenses.

Simply start by listing all of your sources of income for the month on one side of a sheet of paper. In another column, list all of your expenses for the month. Remember that no one month is perfect, so there is no perfect budget. In my house we budget with cash envelopes and write the budget with pen and paper. Spreadsheets and debit cards could be your jam but you have to find a system that works for you.

Also, if you want to try digital cash envelopes, you can sign up for an account with Qube Money and give that a shot as well.

However, as you get a feel for your true expenses, meaning what you actually spend your money on, you’ll be in a better position to figure out if you can afford your student loan payments.

I cover more about getting started with a budget in my book, “Budgeting for Women.”

Increase income and cut expenses

You may find that your budget just simply doesn’t balance. This could be because your expenses are too high or because your income isn’t high enough. It could be both. Because you can only cut expenses so far, look for ways to increase your income through side hustles, raises, part-time employment, or even a completely new job. And starting a side hustle doesn’t mean you have to be a full-time entrepreneur, but rest assured that what someone is paying you do to 9-5, someone else will pay you to do from 5-9 and probably pay more.

For even more ideas on what you can do for a side hustle, check out my friend Nick Loper’s podcast and blog, Side Hustle Nation.

Take advantage of repayment options

Sometimes that math just doesn’t work out, and your student loan servicer wants more per month than you can afford and still eat like a normal person. In that case, head to and look over your repayment options. You might even be able to consolidate your loans and get a lower monthly payment.

Don’t discount any repayment option, and talk to your servicer sooner rather than later to ensure you and your budget are solid so you know how much you can spend per month on student loan repayment.

In the end, early communication and deep knowledge of your household finances will help you be better prepared for payments to resume on January 1, 2023. And while no one wants to think about that going into the holiday season, the better you’re prepared for both, the easier life will be in the end.

Leave a Reply

I am a navy veteran and military spouse. I write about budgeting, savings, and debt.

Learn more about me and how I can help you here.

budgeting with cash

Grab Your FREE Money Tracker

Amazon Associates Disclosure

Wendy Coop and Coop Creative Consulting LLC participate in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to