The Student Loan Payment Freeze Is Ending on January 31. Now What?

The student loan freeze ends on December 31st.

UPDATE: As of 12/4, the Department of Education has announced that the memorandum has been extended for another month. The pause on payments and interest will continue through January 31, 2021. We are monitoring for further updates — stay tuned.

Earlier this year, the CARES Act froze federal student loan payments and interest for millions of borrowers. Originally set to expire in September, President Trump has extended the freeze until January 31st, 2021.

It is possible that the memorandum may be extended again — either by the current president or the new administration after they take office in January — but there’s no guarantee.

As of right now, starting on February 1st, it’s back to business as usual for student loans. All payments will resume and interest will begin accruing again.

That deadline is coming up fast. If you feel unprepared, you’re not alone. Here are some steps you can take to make sure you’re ready.


Take stock of your current loan situation.

For many borrowers, the memorandum was a gift. Their loans became one less thing to worry about at a time when the world felt a lot heavier. But that “out of sight, out of mind” mentality won’t be sustainable come February 1st.

To reduce the stress of returning to your payment plan, start easing back in now. It might have been a while since you took a hard look at your loan situation — but now’s the time to start looking.

Log into your accounts and spend some time reviewing those numbers. Ask yourself honestly: Will you be able to afford your monthly payment when it’s due? (If you think you’ll have trouble making payments, you may have options — we’ll get to that in a minute.) After months without payments due, you may have to shift your budget around to get back into the swing of things.

It’s also a good idea to double check that you know your servicer, your due date, and what kind of loans you have — just in case. There have been a lot of changes in the student loan space this year, and it’s best to keep a close eye on your info.

We’d recommend using Summer’s loan sync feature. By organizing all your loan information in one place, you’ll get a more complete picture of your current status.


Enroll in an income-driven repayment plan.

Although it could potentially benefit anyone with federal loans, this option may be especially helpful if you’re one of the millions of Americans who have lost their jobs or seen their incomes reduced due to the pandemic.

Income-driven repayment (IDR) plans base your monthly payments on how much money you make. Under an IDR plan, your payment will be based on 10-20% of your discretionary income. This means that your payments could be as low as $0. Yes, really.

Even if your payments are reduced to zero, they would still register as a payment. So if you are enrolled in a forgiveness program like Public Service Loan Forgiveness that requires you to make a certain number of monthly payments, you would still be on track for completion of the program.

Interested in exploring IDR but don’t know where to start? We can help. Summer has helped thousands of borrowers find and enroll in the right IDR plan for their situation. Learn more and create your free Summer account today.


Explore your options.

Even if your repayment strategy worked for you pre-pandemic, 2020 may have uprooted those plans. It might be worth it to reassess your loan management path to find the most realistic route moving forward.

Under the student loan system, there are several different options for repayment or forgiveness. This is all based on each borrower’s unique situation — from your loan type and income level, to your profession and career path. But unfortunately, many borrowers aren’t aware of the range of options available to them.

That’s where we come in. With Summer, you can easily build (or rebuild) your loan repayment plan based on your own unique situation. On our platform, you can review your current loan balance, receive personalized advice, and apply for forgiveness programs — all in one place.


Reach out for help if you need it.

Listen, we get it. After all we’ve been through in 2020, the idea of having to face your loans again can be very stressful.

If you need a little extra help getting back into it, we’ve got you covered. Our student loan experts are standing by if you need guidance, clarification, or a pep talk. We’re here to make sure you don’t have to face this alone.


Take the next step to prepare for February 1st by signing up for a free Summer account.

Questions? Reach out to our student loan experts at [email protected]

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