The End of the Student Loan Payment Pause: What Your Employees Need to Know

The End of the Student Loan Payment Pause: What Your Employees Need to Know

Editor's Note: Since the writing of this article, the federal student loan payment pause has been extended into 2023 as the Supreme Court decides whether the Biden-Harris Administration’s Student Debt Relief Program can proceed. The U.S. Department of Education announced loan repayments may resume as late as 60 days after June 30, 2023.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily gave a reprieve to those paying back federal education loans owned by the U.S. Department of Education. Now, as the end of that reprieve approaches, HR professionals are going the extra mile to prepare employees who will need to resume repaying their federal student loans again in September 2022.

The first priority for many HR leaders is to provide clear communication to employees about how to handle the end of the pause and the resources available at work that can help. Clear communication is especially important for employees still working from home or returning to the office on a hybrid basis.

As you strategize support for workers facing the restart of student debt payments, consider emphasizing the following four advice points in your communication and education efforts.

1. Take Full Advantage of the Payment Pause Extension

Under the CARES Act, many federal college loan payments were suspended and their interest rates were temporarily set to 0%. This pause was originally going to expire in September, 2021, but in early August, the government announced that it would extend federal loan relief through January 2022. On December 22, the Biden administration extended the pause on federal student loan repayment again through May 1, 2022, and on April 6, 2022 it was extended yet again through August 31, 2022.

It’s likely that your employees who have these federal loans received a notification about the extension from the Department of Education and/or their loan servicer or that they heard about it from the media.

Consider following up with an HR advisory via email or another channel that you know is effective in reaching your employees. In addition to explaining the extension, you may want to provide a to-do list to employees, gently suggesting that they do the following.

•  Contact their loan servicer to update any contact information and check their loan status, balance, and interest rate. Importantly, they’ll need to double check monthly due dates and payment schedules, both of which may have changed.

•  Check if they are among the large number of borrowers who may be affected by the departure of two large loan servicers that are exiting the federal education loan business. All federal loan borrowers should keep an eye out for an email or letter from the Department of Education or their servicer on what they need to know if their loan is being transferred to another firm.

•  Remember that there are still some months of the extension left during which no interest is being charged on their loans. For employees who can afford it, making payments during the pause can help lower their loan balance because the entire amount of the payments will go toward principal.

•  Consider taking advantage of the extension in another way by putting the money they would have been paying toward student debt into retirement or emergency savings plans, which may have been neglected in the past.

2. Make Sure Student Loan Assistance Benefits Are Accessible

Do your employees know what your company does to support education loan repayment? Do they have easy access to the help you provide?

New government rules make it easier for employers to offer student loan repayment benefits. Employers may now provide $5,250 tax-exempt annually for an employee’s student loan repayment through 2025.

The change has encouraged many firms to begin offering this benefit. But in the rush to take advantage of the new rules and employees’ continuing to work away from the office, your workplace may not be aware of this help. Be sure you’re clearly communicating how, when, and why employees should consider enrolling in these programs.

3. Customize Financial Counseling Services for Student Loan Borrowers

One-on-one counseling with a personal finance expert can help employees adopt budgeting and planning strategies that can prepare them for the end of the pause. Many financial wellness programs offer one-on-one counseling, often specifically for debt management.

If your firm is one of those, you’ll want to make sure that employees know this benefit is available and how best to access it. Additionally, you want to be sure the counselors you send your employees to have experience in college financing.

With these knowledgeable counselors on board, you can help educate employees quickly on how best to handle the restart of loan payments in May. And for your employees who can’t afford to restart payments, be sure counselors are knowledgeable in alternatives such as forbearance, deferral, and government income-driven repayment programs.

Refinancing may also be an option for some employees, especially in this current low-interest rate environment.

4. Help Employees Balance Debt Management with Other Financial Goals

Burdensome student loan payments can make it difficult for employees to prioritize other important financial goals. Make sure borrowers in your workforce understand the full range of financial wellness benefits your organization offers beyond student loan relief. This might include payroll-deduction emergency savings programs and, of course, retirement savings plans and matches. Information on how all of these benefits work together to establish short and long-term financial security can help employees see the big picture beyond their current challenges.

As an HR professional, you already know that debt of all kinds can cause stress among your employees, and that that can lead to a loss of productivity. Be sure to advise employees on any stress management and other wellness programs your firm offers that can help employees cope with the pending restart of federal student loan payments.

The Takeaway

A leading provider in the student loan space, SoFi at Work offers a student loan repayment program that can help you help your employees cope with college financing debt.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

CLICK HERE for more information.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For information on licenses, see NMLS Consumer Access ( ). The Student Debt Navigator Tool and 529 Savings and Selection Tool are provided by SoFi Wealth LLC, an SEC-registered investment adviser. For additional product-specific legal and licensing information, see Equal housing lender.

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Walecia Konrad ABOUT Walecia Konrad Walecia Konrad is an award winning financial journalist and content producer specializing in health care and personal finance. She has held staff jobs at and contributed to several media outlets including The New York Times, Money, SmartMoney, BusinessWeek, NerdWallet and She currently develops content, including web, video, print and social media, for several financial services companies.

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