Right now, you’re not required to make any federal student loan payments. Since March 2020, federal student loan payments have been paused, which collectively has saved student loan borrowers $5 billion each month for nearly two years. However, one of the smartest things you can do is pay whatever you can toward your federal student loan payments. In addition to temporary student loan forbearance, there is no new interest accrual on your federal student loans. Therefore, every dollar you pay on your federal student loans first will reduce your current interest and then directly reduce your principal student loan balance. This is a once-in-a-lifetime opportunity to pay off student loans without new interest accruing. Not everyone has extra money to pay student loans now. However, even paying a small amount each month can help.
The next time you receive a bonus, gift or other cash payment, consider making a one-time, lump-sum payment on your student loans. Contact your student loan servicer in advance and instruct your servicer to apply your total payment toward your current month’s payment and reduction of your principal balance. Without that written instruction, your student loan servicer may only pay your minimum payment due and hold the remaining balance until next month’s student loan payment.