The State of Federal Student Loan Repayment

Federal student loans are back

During the height of the COVID-19 pandemic, federal student loan payments and interest were paused to provide relief to millions of borrowers. That emergency pause has now ended, and federal student loans have entered a new, active repayment phase that affects nearly 44 million borrowers across the United States.

Since repayment restarted, policy details have continued to evolve. Broad, one-time cancellation efforts were blocked in court, but the Biden Administration has pursued alternative forms of targeted relief and new repayment options designed to make monthly payments more manageable for many borrowers.

As repayment continues, it is essential to understand:

• Who is servicing your loans;
• How your loans fit into your monthly budget;
• Which repayment plan options are available to you;
• Where to find help if student loans make it harder to cover other essential bills.

Student loan repayment can feel daunting, but there are practical steps you can take to navigate this transition.

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Tip 1: Find and Contact Your Loan Servicer

Your loan servicer is the company that manages your federal student loans on behalf of the U.S. Department of Education. This is the organization that:

• Sends your monthly statements;
• Processes your payments;
• Helps you change repayment plans or apply for programs like income-driven repayment.

Common federal loan servicers include companies such as Nelnet, MOHELA, and others. If you are not sure who your servicer is, you can:

• Log in to your account at StudentAid.gov using your FSA ID;
• View your federal loans and see which servicer is assigned to each one;
• Click through to your servicer’s site to create or update your online account.

Once you know who services your loans, make sure your:

• Email address is current;
• Mailing address and phone number are up to date;
• Communication preferences are set the way you want.

Your servicer will send important updates about when your payments are due, how much you owe, and what repayment options might lower your monthly bill.

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Tip 2: Update or Create Your Budget

For many people, student loan payments are one of their largest monthly expenses. Adding that payment back into your life can be challenging, especially if your income or expenses have changed since the pause began.

A realistic budget helps you:

• See where your money is going;
• Decide where you can cut back;
• Make a clear plan for how to fit student loans into the bigger picture.

If you are new to budgeting or want a simple system that adapts to your lifestyle, try the Esusu Spending Planner. The planner is based on the 50/30/20 method:

• 50% of your income goes toward necessities, including housing, utilities, transportation, and minimum debt payments;
• 30% goes toward discretionary spending, such as subscriptions, dining out, or entertainment;
• 20% goes toward savings and long-term goals, including emergency funds, retirement, and paying extra toward high-interest debt.

You can use this framework to:

• Decide how much room you have for student loan payments;
• Identify expenses to reduce so you can free up cash;
• Build savings to cushion your budget as repayment continues.

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Tip 3: Explore Your Repayment Options

If you have federal student loans, you may qualify for a range of repayment plans designed to fit different incomes and life situations. These include:

• Standard repayment plans, where you pay off your loans over a fixed period with equal monthly payments;
• Graduated plans, which start with lower payments that increase over time;
• Income-driven repayment (IDR) plans, which base your payment on your income and family size, and may offer forgiveness of any remaining balance after a set number of qualifying payments.

One newer IDR option is the SAVE Plan (Saving on a Valuable Education), which can:

• Reduce monthly payments for many borrowers, including some whose calculated payment may be as low as $0 based on income;
• Offer forgiveness after a specific number of qualifying years in repayment, depending on your loan type and original balance.

To compare repayment plans and see estimated payments:

• Visit the Federal Student Aid repayment plan page;
• Use the loan simulator to plug in your income, family size, and loan information;
• Talk to your loan servicer about enrolling in or changing to a plan that better fits your budget.

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A Note on Refinancing

If your interest rate is very high, you might see advertisements for refinancing your student loans with a private lender. Refinancing can sometimes:

• Lower your rate;
• Reduce your monthly payment;
• Simplify multiple loans into one.

However, refinancing a federal student loan into a private loan comes with tradeoffs. You will:

• Lose access to federal benefits such as IDR plans and most federal forgiveness or cancellation programs;
• No longer qualify for federal pauses or emergency relief on those refinanced loans.

Before you refinance, compare the potential savings to the value of keeping your federal protections. If you are unsure, consider talking with a trusted financial counselor or advisor.

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Need Assistance Beyond Your Student Loans?

If you are worried that restarting student loan payments will make it harder to cover other essential bills like rent or utilities, Esusu has resources that may help eligible renters.

Rent Relief

If you live in an Esusu community and experience a temporary financial hardship, you may be able to:

• Apply for up to three months of rent relief in the form of a 0% interest loan sent directly to your property manager;
• Work with Esusu to set up a 12-month repayment plan tailored to your budget.

Rent relief can help you stay housed and avoid falling behind on rent while you manage student loan repayment or other financial shocks.

Financial Resources Through the Esusu Renters Marketplace

Esusu’s Renters Marketplace connects renters with curated financial tools and benefits, including:

• Utility bill assistance and discounted internet access programs;
• Student loan support through Savi, which can help borrowers explore repayment and forgiveness options;
• Partnerships with companies like Caribou for potential auto loan savings, Sure Insurance for renters insurance options, and findhelp.org for localized social support resources.

These services can help lower everyday costs, free up room in your budget, and give you more support as you manage student loan repayment.

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Rent Reporting to Support Your Credit

If you want to improve your access to better refinancing options or lower-rate credit in the future, your credit score matters. Rent reporting can help.

With Esusu Rent Reporting, eligible renters can have their on-time rent payments reported to the major credit bureaus as a positive tradeline. This can:

• Help establish a credit history if you are new to credit;
• Strengthen an existing profile by adding a consistent track record of on-time payments.

To confirm your enrollment:

• Check with your property manager; or
• Email rentsupport@esusu.org and ask whether your property participates in Esusu Rent Reporting.

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Stay Informed

Student loan repayment policy can change, and new programs or temporary relief measures may be introduced over time. To stay informed about:

• Updates related to federal student loan repayment;
• New tools and resources for renters;
• Tips on budgeting, credit, and financial resilience;

follow Esusu on Instagram at @myesusu and keep an eye on Esusu’s renter education resources.

You do not have to face student loan repayment alone. With the right information, a thoughtful budget, and support where you need it most, you can build a repayment plan that protects both your housing stability and your long-term financial health.