Student Loan Repayment: Back Like Never Before

Sep 27, 2023

Just like that, the joy ride is over. Federal student loan payments are due for the first time since March 13, 2020. Interest began accruing on September 1, with payments coming due in October. Since it’s been a while, let’s discuss the three items you should review as payments restart.

Times Have Changed, Should Your Repayment Plan Change Too?

It’s not abnormal for borrowers to feel they are in a different spot financially since March of 2020. The pandemic brought about rising wages and allowed many Americans to stockpile cash. If your balance sheet or budget has evolved over the last three and a half years, it might be worth your while to re-consider your student loan repayment plan. There is no shortage of Federal repayment options, including the standard 10-year plan, the graduated plan, and several income-driven plans.

President Biden’s SAVE Plan is new to the scene, replacing the REPAYE Plan. Payments are based on income and family size, resulting in the lowest monthly payment for most borrowers. Most importantly, as long as you make your monthly payment, unpaid interest will not be added to your balance. After 20 years of payments, the remaining balance is forgiven.

Student Loan Servicers

There have been several shakeups at the student loan servicing level. Mid-deferment, Navient, FedLoan, and Granite State left the student loan business, meaning all loans they serviced were transferred elsewhere. The Consumer Financial Protection Bureau stated that 4 out of every 10 borrowers will begin repayment with a new servicer. If you haven’t yet, set up your new account before repayment begins.

To protect against late payments or default, it’s best practice to enroll in auto-pay. There’s even a financial incentive. Most servicers will provide a 0.25% discount on the interest rate of your loan if you enroll in auto-pay. Even if you had auto-pay set up before the pandemic, it’s a smart move to verify everything is in working order.

Cash Flow

Many workers started new jobs at higher salaries during the pandemic, a moment dubbed the Great Resignation. Without student loan payments, budgets loosened for increased savings and lifestyle creep. If you’re freaking out about where the money for the resumed student loan payment will come from, take a deep breath. As you comb through expenses, consider maintaining some level of investment. It’s possible to work toward both debt payoff and retirement goals. Just talk to your financial planner!


With student loan repayment resuming, take the time to reassess your strategy. If you’re unclear on the best path forward, contact your Bedel Team for guidance.

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We have helped our clients answer these questions and more. If you want a clear understanding of your financial future, and need help making changes to reach your goals, schedule a consultation and we can get started.

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The material has been gathered from sources believed to be reliable, however Bedel Financial Consulting, Inc. cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This article is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through Bedel Financial Consulting, Inc. Advisory services are only offered where Bedel Financial Consulting, Inc. and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place.

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