The state of federal student loan repayment

Federal student loans are back

The federal student loan repayment pause and interest freeze that began in 2020 during the height of the COVID-19 pandemic is ending this fall. The return to repayment will affect nearly 44 million borrowers in the US, and the terms of repayment have been shifting since the end of the pause was announced. 


This comes at a time soon after possible relief from President Biden’s proposed loan forgiveness act was struck down by the Supreme Court. 


Here’s what we know so far about the path to repayment:

  • Interest on student loans is set to restart on September 1, 2023, and repayments will begin again in October. 
  • The Supreme Court struck down President Biden’s general loan forgiveness plan, but the Biden Administration is pursuing alternatives to help borrowers. 
  • The White House has proposed an “on-ramp” program from October 1, 2023, to September 30, 2024. Any missed or late loan payments will not incur penalties or affect your credit score during this period. 


And if you need a refresher, here is a timeline of everything that has happened with student loan repayment pauses, freezes, and forgiveness in the last several years.


Student loan repayment might seem daunting, but Esusu is here to help! Below are our tips to make your transition back to repayment as seamless as possible. 


Tip 1: Find and contact your loan servicer

Your loan servicer is the company that handles the repayment of your loan and all other business associated with it. You’ll be making your monthly payments to the loan servicer, so it’s important to know what servicer you have. 


Nelnet, MOHELA, and Sallie Mae are the most common servicers of student loans, so your loan is likely managed through one of these companies. If you’re unsure who is servicing your loan, can help you find out.


Once you know who your loan servicer is, make sure that your contact information is up to date in their system, as they’ll be sending you communications on when and how your loan repayment will begin, including payment options that can help reduce your monthly payments.  


Tip 2: Update (or create!) your budget

Your student loan payment might be one of your biggest monthly payments, with many borrowers spending hundreds of dollars a month repaying their loans. Fitting this expense back into finances can be challenging. That’s where a solid budget comes in. 


Having a budget helps you visualize your spending more easily and can help you decide where you can cut back to put more money toward your loans. 


Check out our Esusu Spending Planner if you’re new to budgeting or are looking for a system that works better for your lifestyle. The spending planner uses the 50/30/20 system; 50% of your income should go towards necessities (including your loans), 30% towards discretionary spending (like subscriptions), and 20% should go towards savings (like emergency funds and retirement).



Tip #3: Explore repayment options

If you have federal loans, there are plenty of repayment options that fit various lifestyles and budgets. Some options, like the newly proposed SAVE program, can bring your monthly payments down to as low as $0 or offer loan forgiveness after a set number of payments. Check out the Federal Student Aid website and speak with your loan provider to see what repayment options are available for you. 


If your interest rate is too high, refinancing is an option. However, consider this option carefully if you have federal student loans. 


When you refinance a loan, you’re essentially taking out a new loan to pay off your old one. This can often result in lower interest rates and lower monthly payments. However, if you refinance a federal loan, your new loan would be private and no longer eligible for federal repayment plans or any potential forgiveness. 


Need assistance?  

If you’re worried about student loan repayment affecting your ability to pay other bills, Esusu has options available for you. 


  • Rent relief: Esusu residents can apply for up to 3 months of rent relief when facing financial hardship. This 0% interest loan is sent directly to your property manager to pay off your rent payment. We’ll work with you to set up a repayment plan over 12 months.
  • Financial resources: Our Renters Marketplace has various resources for renters needing extra financial help, including utility bill assistance and discounted internet access. We’ve also partnered with companies like Caribou, Sure Insurance, and to help bring you savings that can help make your student loan repayment less stressful.
  • Rent reporting: Need to boost your credit score to get the best refinancing options? Check with your property manager or email to ensure you’re enrolled in Rent Reporting with Esusu. We report each on-time rent payment you make to help you improve your score with no extra work on your end.


Keep up with Esusu on Instagram to stay up-to-date on the latest renter and finance news, including any updates to student loan repayment!