Will My Federal Student Loan Payment Change in 2022?

Will My Federal Student Loan Payment Change in 2022?



The federal student loan payment pause ends on Jan. 31, 2022. The question on many minds is: Will monthly payments be exactly what they were before the Covid-19 emergency relief measure kicked in?

“Yes, the amount will be the same,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance.

So it seems that people with federal student loans will be picking up where they left off when they get the first bill in February, even if they made a payment or more during the pause.

The Department of Education has already made changes in repayment for people who have public service jobs, and more changes could be on the way.

Also, now, more than ever, loan restructuring can be a path to lower payments.

It’s important to be prepared for the end of federal student loan relief. Staying tuned to the latest developments on the student loan front will help, too.

What If I Made Payments During the Pause?

As of March 2021, only 500,000 Direct Loan borrowers, among all 42.9 million federal student loan holders, had continued making payments during the federal student loan payment holiday, which began on March 13, 2020.

For them, the question is: Will my student loan payment be smaller?

No. The monthly payment amount will not be reduced because you made payments during the pause, Buchanan said. However, such payments are expected to reduce the number of months or years required to pay off the loan.

During the payment and interest holiday, the full amount of any federal student loan payment made was to be applied to the principal balance, once any interest that had accrued before March 13, 2020, was paid.

What to Do If You Have a New Loan Servicer

To find out the length of your loan and get any other answers, contact your loan servicer. It’s possible you will have a different company to deal with than you had before the pause.

Millions of borrowers, for example, are to send their federal student loan payments to new loan servicers as FedLoan Servicing, Navient, and Granite State cease their contracts.

Buchanan said the automatic transitions are going smoothly.

If you have any uncertainties about your loan, contact the company, Buchanan said. Waiting until January or February is not the best idea, since a lot of people will be seeking answers. The financial cliff won’t be less daunting the longer you wait.

The first place to try is your loan servicer . But if you’re not sure who that is, call 800-433-3243.

The Latest on Student Loan Refinancing

During the long forbearance, the government not only deferred payments but waived interest on federal student loans. At the same time, interest rates on refinanced loans with private lenders have remained near historic lows.

For some people, this is creating an interesting choice.

Student loan refinancing can decrease monthly payments, depending on the terms of the loan. By refinancing federal student loans, though, borrowers forgo federal student loan forgiveness programs and income-driven repayment plans.

President Joe Biden has forgiven nearly $10 billion in federal student loan debt since taking office. And he campaigned on canceling $10,000 in federal student loans across the board. But that proposal hasn’t gone anywhere, despite many calls for specifics.

Private student loans have not been included in the proposals or actions.

The Takeaway

Federal student loan holders will see no change in payment amount after Jan. 31, when the payment holiday ends. It’s a good time to look at rates you’re paying on your loans and to see if loan restructuring could help.

SoFi has a program that allows qualified federal student loan borrowers to lock in today’s low interest rate on a refinance without giving up the federal payment holiday.

The loan would be disbursed on Dec. 20, when interest would start accruing, and the first payment on the refinanced loan would be due on Feb. 1, 2022.

It might be a good time to check your rate on refinancing.

Learn More

Photo credit: iStock/Prostock-Studio


SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. 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.

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.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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