Student Loan Payment Guide: How To Budget For Resuming Student Loan Payments

Debt Payoff
Written By Virginia Weir

*This article explains student loan payments resuming for Federal student loans. This article does not cover private student loans.

The United States Government is calling… and it’s not for a late-night hookup. 

Despite President Joe Biden’s best efforts, student loan payments will resume for the first time since March 27, 2020, ending the student loan payment reprieve.

Important Dates to Remember: 

  • September 1st: Student loan payment interest resumes

  • October 1st: Student loan payments resume

  • December 1st: IDR (Income-driven Repayment) student loan payment plans adjustment deadline 

If you’re one of the 45 million student loan borrowers, you’re likely feeling anxiety about making room in your budget for these payments, which on average clock in at $503 per month.

Here are 7 suggestions on how to ease into student loan payments again:

Check out my “Before Student Loan Payments Resume Checklist” Below

I’ve compiled a list of items for you to check off before student loan payments resume. This will help you locate your loans, update all of your information, apply to income-driven repayment plans if you qualify, and more.

DOWNLOAD THE CHECKLIST HERE.

Make a Monthly Budget With Student Loan Payments Included

The next step is to put pencil to paper (or finger to keyboard?) and see where your money is coming from and where it’s going.

By completing a monthly budget to the best of your ability, you can see if you can afford your student loan payment right now. 

My advice on how to start a budget is to go through the last 3 months of your bank account transactions. Categorize what you spent money on and average the amounts in each category based on the average of the last 3 months. This will be your rough draft budget based on real numbers.

You can budget using apps like Usemuchapp or Mintapp. You can also use customized budget templates, Excel, Google Sheets or paper and pencil. It really doesn't matter, as long as you’re comfortable with how you’re budgeting.

I personally use the zero-based budgeting method and my favorite budget template (and the one I use for my clients) is the Price of Avocado Toast 12 month zero-based budgeting system with monthly spending tackers.

Another favorite is A Sunny Side Up Life’s Digital Budgeting Worksheets.

Different budgeting methods to consider:

If you’re having trouble with this, I offer 1:1 Financial Coaching services here.

Cut Spending Where You Can To Accommodate Your Student Loan Payment

Unfortunately, you may have to cut your spending so you can afford your student loan payment. I focus on cutting from “the big three” first: housing, transportation, and groceries. 

If you can’t slice anything from those three categories, go to subscriptions and service providers next. Cell phone bill (I use Mint Mobile), internet bill, subscription boxes or streaming services, life insurance, etc.

Once you’ve exhausted all of those categories, it’s time to cut from “fun,” aka: entertainment, going out to eat, and personal care.

Increase Income To Accommodate Your Student Loan Payment

Alright.. So you’ve completed the checklist, you’ve made a budget, you’ve decided on what you’re going to cut. Now, it’s time to increase your income! That is… if you’re reasonably able to increase your income. 

How do you increase your income? Here are a few ideas:

Here are a few people you can check out for side hustle inspiration:

Begin Making Student Loan Payments “Now”

Instead of waiting for October 1st to have your money ready, start saving up now. Put away money as if a loan payment were due this month. 

It may be a stretch, but it’s better to get used to socking away money for your student loan payment now rather than wait until the last minute.

Put this money in a savings account, separate from your other bills. OR if you have a savings account dedicated to only bills, park the money in that savings account.

Split Your Student Loan Payment In Half

A great way to manage bills and big payments is by dividing the payment in half during the month. 

Since the first student loan payment is due October first, put half of the payment away during September 1st-15th and the second half of the student loan payment away from September 16th- the end of the month. 

Paying your monthly student loan bill this way will soften the blow and avoid paying $500 (or however much your payment ends up being) out of one check at the end of the month.

Again, I recommend putting this money in a savings account, separate from your other bills. OR if you have a savings account dedicated to only bills, park the money in that savings account.

Request Forbearance or Deferment 

The reality is that with COVID-19, inflation and the rising cost of living, you may not be in a position to immediately start paying back your student loans. 

Trust me when I say it's better to face this head on than to put your head in the sand and wait for your credit to tank or your financial situation to worsen. 

If this is you, learn more about forbearance and deferment here.

Before Student Loan Payments Resume Checklist:

DOWNLOAD THE CHECKLIST HERE.

For more student loan information follow these folks:

Sources:

Disclaimers:

  • Links may be affiliate links.

  • For educational purposes only.

Virginia Weir
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