Student loan repayments resume in February: USD professor on how to prepare


SAN DIEGO — Approximately 43 million Americans will have to start paying off their student loans again in the new year, when a pause on repayment ends.

The federal government suspended loan payments, instituted a 0% interest rate and stopped collections on defaulted loans during the COVID-19 pandemic. The U.S. Department of Education announced in August that the pause will end after Jan. 31, 2022.

Dan Roccato, a clinical professor of finance at University of San Diego, said one of every eight Americans has student loan debt and the average amount is $37,000.

“Some folks are struggling to find the right kind of job that pays enough to help them pay off these loans,” Roccato said. “The reality is, a lot of these students come out with a boat load of debt the size of Wyoming.”

Roccato pointed to a recent study in which 89% of borrowers said they’re not ready to restart payments. He said the key to getting back on track is to start planning now.

“Now is the time to start thinking about, how do I make room in my budget?” he said. “Remember the budget is two sides, it’s expenses and income. So now may be that time to get that gig job, that part time thing. Whatever it is to try to get some extra cash in before these loans are due.”

The federal government offers income-based repayment plans that Roccato said can be somewhat complicated but help lower monthly payments for those who are eligible. Refinancing high-interest loans is another option, though Roccato warned to avoid refinancing into private loans, which can come with stricter repayment guidelines.

“There’s also things for if you’re out of work, looking for work. There’s an unemployment deferral,” he said. “You can do that for up to six months but be careful because the interest keeps accruing.”

The federal government recommends updating contact information on your loan servicer’s website and in your profile ahead of February 2022.

Roccato said when it comes to student loans, one of the best things you can do is make payments higher than the amount due each month.

“The average payment is about $300 and most student loans at the undergrad level are 10 years. So if you’re making your payments on time you should be getting rid of them in 10 years,” he said. “If you can pay an extra $5, $10, $15 a month — whatever it is — you will turbo charge that payment schedule and get rid of it a lot faster.”

He encouraged anyone who is struggling to repay loans or has additional questions to visit

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