The pause on student loan payments ends Dec. 31 — everything you need to know

student loan with money surrounding it
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According to the U.S. Department of Education, the pause on student loan repayment, interest and collections will end on December 30, 2022, meaning payments will resume in January 2023. And while President Biden’s loan forgiveness efforts provided some financial relief for college students and graduates, many are still left with large sums left to pay off, especially those who had to take out private student loans and did not receive any forgiveness benefits.

In consideration of payments restarting in January of 2023 in the face of inflation and rising interest rates, not to mention right after the holiday season, it's important to start creating a plan of action around your loans now, rather than later. For many, this will mean making their budgets even tighter. However, the below tips will provide insight into how you can pay off your student loans as soon as possible.

How you can pay off student loans as soon as possible 

Many have already had to make cuts to their finances to account for inflation, and with the pause on student loan payments coming to a close at the end of this year, paying off student debt can seem daunting. However, there are ways in which you can manage these loans and get them paid off allowing you to use that money elsewhere. 

Keep in mind, however, that while repaying student loans is important, it doesn’t necessarily have to be a race to the end for everyone. While ultimately paying off student debt is the best course of action, it’s important to consider your other financial goals, responsibilities or debts in order to decide the best course of action for your money.

For example, it could be more wise to prioritize saving for an emergency fund instead of funneling all that cash into your student loan payments. Additionally, if you have another loan with a higher interest rate than your student loans, you might instead prioritize getting that paid down. 

If your student loans are getting in the way of your financial health, the below steps will help you pay down those balances quickly. 

Creating a successful budget

It should come as no surprise that the first tip on this list is to start your loan repayment journey by creating a detailed budget, an important step for any financial goals you may have. 

Having an overview of income and expenses will help you visualize how your money is being spent daily or monthly, whether it’s to pay for bills, forgotten subscription services or too much take-out. Going forward with this information, you’ll be able to identify areas in which you’ve been excessively spending and could afford to cut costs to save a few bucks. The money you save by doing so can then be put towards prioritizing your loan repayments each month. 

By downloading a budgeting app, like Mint, you can make the process of analyzing your expenses easier, as most do it for you. Most also provide expert tips to manage money along with other notable features.

Auto Pay Deductions

You’re probably already familiar with auto-payments for bills, but did you know that you can set this up for student loan payments as well? Not only will it prevent you from missing a payment, but most of the time your loan servicer will decrease your interest rate if you opt to pay this way. 


Make additional payments 

While obvious, one of the easy ways to pay off your student debt as soon as possible is to pay more each month. This means raising your payment amounts and trying to make payments bi-weekly. Increasing the amount of your payments, even if by a little bit, will still help chip away at your debt faster.

Of course, increasing payments will depend on how much money you can afford to spend. This is where a budget comes in handy, as you’ll likely have to cut back spending in other areas to make this work. However, keep in mind when making extra payments to ensure they are going to your principal balance, and aren’t just rolled over to the following month, resulting in a “paid ahead” status.

Further, by increasing your payments, it will also help you combat interest that is accruing on your loans. Interest rates on loans can be quite expensive, so the lower your total balance is, the less interest you’ll end up having to pay. This is why it’s important to lower your balance as soon as you can. 

Refinancing for a lower interest rate

For those who are struggling to pay down their student loan debt due to an exceptionally high interest rate, refinancing is an option. Doing so could allow you to be approved for a lower rate than what you started with, allowing you to pay off this debt faster. When refinancing, you’ll likely want to have a credit score in the high 600s, as well as stable income to get the best rates. However, recent college graduates don’t typically have super strong credit, so that’s something to consider when figuring out if refinancing is right for you. 

Student Loan Forgiveness Programs

For qualifying individuals, there are several student loan forgiveness programs available to assist you in eliminating the burden of your college degree. While not everyone will be able to receive these benefits, you should still check to see if you are eligible for any of these programs.

For example, Public Student Loan Forgiveness (PSLF)  is for those employed full-time by a U.S. federal, state, local, or tribal government or not-for-profit organization. Eligible recipients must repay their Direct Loans with an income-driven repayment plan and have made at least 120 payments. You’ll then have your remaining balance forgiven. 

Bottom Line

Overall, while Biden’s plan to forgive $10,000 in student loans for those making less than $125,000 and $20,000 for those who received the Pell Grant is a step in the right direction, many of us are still left with whopping student debt balances. That’s why it’s important to be prepared when payments resume as the year comes to a close. The above steps are geared toward helping you get your student debt under control. 

Erin Bendig
Staff writer, personal finance

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.