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CHARLOTTE, N.C. — Starting this month, federal student loan payments will once again be due, leaving many people scrambling to redo their budgets.

Millions of people didn’t have to pay anything toward their loans over the last few years due to the COVID-19 pandemic, meaning money that was likely pouring into the economy will now be rerouted to those loan payments. 

RELATED: Student loan borrowers to begin repayments Oct. 1

Julia Napier had been breathing a little easier for the last three years due to that pause.

“It freed up a lot of money for me,” Napier said. “I was able to save quicker and faster and able to do things I wasn’t able to do before.”

The 2013 University of South Carolina graduate, along with millions of other federal student loans borrowers, didn’t have to pay down their loans during that three-year-plus pause. It’s a tough return to normal Napier isn’t excited about.

“It’s pretty heavy,” Napier said. “It’s a big burden mentally and emotionally. It’s kind of always there in the back of my mind. Now that it’s starting back up again, it’s gonna be a tight crunch, so I’m not looking forward to it.”

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Will Koster is a certified financial planner and student loan expert with Spaugh, Dameron, Tenny, LLC. Koster said many borrowers are going to have adjust their budgets, especially considering the impact of inflation.

“They will have to recalculate budgets, retool where they’re putting money on a monthly basis to make sure they can fit that it into their cash flow,” Koster advised.

He said insiders worry what that will mean for the economy.

“I don’t think the impact is known yet, because the consumer is a big part of the economy and their spending is what’s driving the growth,” Koster explained. “And with student loan payments coming back in, a couple hundred dollars a month means [maybe] not eating out as much [or] defaulting on car loans, so it will be interesting to see the impact.”

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Koster said borrowers need to be their own financial advocates and should make sure the companies holding their loans are asking for the right amount, with the correct interest rate. He also advised federal student loan borrowers should consider refinancing or finding available forgiveness programs.

Napier already has a plan, though she doesn’t love it.

“I’m definitely gonna have to buckle down and won’t be able to put as much towards savings,” Napier admitted.

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Here’s what experts recommend borrowers do if they haven’t made a payment in the last three years:

Check your loan servicer

The first step is to log in to your U.S. Department of Education’s Federal Student Aid account and check who your loan servicer is. Many loan servicers changed during the pandemic, so you might have a different one than you did back in March 2020. 

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See the status of the loan

Once you know your loan servicer, you’ll log into your account with them to access your student loan balance, monthly payment amount and interest rate. It’s important to also look at which type of student loan you have, so you know which income-driven repayment plans you might qualify for. 

If you think you’ll have a hard time making payments, you have several options. This summer, President Joe Biden announced a 12-month grace period to help borrowers who struggle after payments restart. You can and should make payments during the first 12 months after payments resume, but if you don’t, you won’t be at risk of default and it won’t hurt your credit score. Interest will accrue whether you make payments or not.

Update the contact info

Update your personal information in your account with your loan servicer to make sure you receive all important correspondence.

Sign up for automatic payments

If you sign up for automatic payments, the servicer takes a quarter of a percent off your interest rate. You can enroll in automatic payments through your loan servicer’s account. Borrowers who were enrolled in automatic payments prior to the payment pause need to re-enroll again,

Ask for help if needed

An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. It takes into account different expenses in your budget, and most federal student loans are eligible for at least one of these types of plans.

Generally, your payment amount under an income-driven repayment plan is a percentage of your discretionary income. If your income is low enough, your payment could be $0 per month.

Last year, the Biden administration announced a new income-driven repayment plan. The SAVE plan offers some of the most lenient terms ever. On this plan, interest won’t pile up as long as borrowers make regular payments.

It’s still possible that the SAVE plan could face legal challenges similar to the one that led the Supreme Court to strike down Biden’s proposal for mass student loan cancellation.

If you’d like to repay your federal student loans under an income-driven plan, the first step is to fill out an application through the Federal Student Aid website.

Watch out for scams

Lastly, stay vigilant about scams. You should never have to pay to get help with your loans or to apply for any programs.

The Department of Education will never call you on the phone, so, if you’re getting a phone call from someone who claims to be with that department, it’s most likely a scam.

To protect yourself from scams, the Department of Education recommends that you know their official email addresses, check for typos in advertisement and never share your log-in information.

The Associated Press contributed to this report.

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