How to prepare for the return of student loans

The U.S. Department of Education extended the student loan pause through May 1, 2022, and given all the changes that have happened over the past two years, borrowers must start preparing now for payments to restart.

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Not only do many student loan borrowers find themselves in a different financial situation than they did at the onset of the pandemic, but a number of the largest companies that service federal student loans have announced that they will no longer be doing so, CNBC reported.

Navient, the Pennsylvania Higher Education Assistance Agency (also known as FedLoan) and Granite State have all announced that they will no longer be servicing federal student loans, CNBC noted, resulting in 16 million borrowers needing to adjust to a new servicer this spring.

Betsy Mayotte, president of The Institute of Student Loan Advisors, told CNBC that because student loan servicers will likely be overwhelmed when payments restart, it’s a good idea to get in touch with your lender as soon as possible. Make sure your payment plan fits your situation and that your contact information is up-to-date.

Federal student loan borrowers should be receiving a billing statement or other notice 21 days before payments are due, according to the Department of Education, which includes payment amount and due date.

You can also get an estimate through your loan servicer. CNBC reported that if you have a different loan servicer, you should be receiving multiple notices. However, if you accidentally send a payment to your old servicer, then the money should be forwarded to your new one.

If you are unemployed or struggling financially because of the pandemic, you can put in a request for the economic hardship or the unemployment deferment, experts told CNBC. You can also use forbearance to suspend payments. Another option is to enroll in an income-driven repayment plan, which makes monthly payments more affordable.

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If you decide to make any changes or need assistance, it’s best to do so now. “I have significant concerns that there will be some big servicing delays,” Mayotte told CNBC.

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This article originally appeared on GOBankingRates.com: Student Loan Payments Restart in May — Here’s How You Can Prepare