Preparing to Pay off a Student Loan – What to do now, and how to avoid incurring student debt in the future | Scholarship

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Last week, the Supreme Court made a momentous decision that affected students and student loan borrowers.

The Supreme Court struck down the Biden administration’s student debt forgiveness plan in Biden v. Nebraska, finding that the education secretary had no authority under the Higher Education Student Forgiveness Opportunities Act of 2003 (the HEROES Act) to create a student loan forgiveness program. The Biden administration’s Student Debt Relief plan was expected to provide debt relief from $10,000 to $20,000 to more than 40 million student loan borrowers, and many of those borrowers made financial decisions based on the expectation that they would benefit from the program.

Due to the COVID-19 pandemic, student loan payments have been paused since March 2020, but payments will resume this fall, with the first payment due October 1, 2023. There is significant concern that borrowers will struggle to make their payments, and that many will default on their loans.

Just hours after the Supreme Court’s decision was announced, President Biden delivered remarks on future plans to support borrowers, and to help ease the transition to repayment:

  • a new income-driven payment plan that will enable borrowers to make student loan payments equal to just 5% of their disposable income;
  • A new transition program on the ramp would Allowing borrowers up to 12 months to get back on track with their loan repayments on time. Borrowers who struggle to make their payments on time can access this mobile program so they have more time to get back on track. Borrowers who pay less than they owe and/or are late in payments will not be referred to credit agencies and will not be considered in default during this time.

Additionally, President Biden has indicated that his administration is exploring other avenues for loan forgiveness through the Higher Education Act.

Avoid taking on new student debt

Avoid taking on new student debt

We know that today is a difficult and disappointing day for students and borrowers. At ScholarshipOwl, we share your frustration and disappointment, but we encourage everyone not to wait for student debt relief that may never pay off. Instead, create a plan to ensure that you avoid paying off student debt in the future, while making sure that you can achieve your dream of an affordable college education.

Student loans should always be a last resort. College can be paid for with federal and state grants, scholarships, and earnings from employment. It is far better to pay for college as you go than to take out loans and graduate with a burden of student debt.

Studies show that most student borrowers take 20 years to pay off student debt. This results in millions of borrowers delaying major life milestones, including delaying marriage, delaying buying a home, postponing having children, prolonging their ability to save for their retirement, and postponing saving for their children’s education – creating a generational challenge.

I already have student debt. What should I do?

Important steps to prepare for loan repayment

For those who have already taken out student loans, here are important steps to take while preparing to pay off your student loan:

  • visiting And make sure the US Department of Education’s Federal Division of Student Aid has your current contact information.
  • While you are on this website, check to be sure who is servicing your student loan(s). Over the past few years, many loan companies have sold their student loans to other companies.
  • Next, go to your loan service’s website and log into your account, or create your account if this is your first time visiting their website.
  • Contact your loan service officer to learn more about the payment options that best meet your needs. There are many payment plans, and they can help you decide which one is best for you.

How can I avoid incurring student debt in the future?

How to pay for college

If you are a current student, or if you plan to attend college or graduate school in the future, plan for your financial future by deciding not to take out new student loans.

  • Work part-time during the school year, full-time during summers beginning in the junior year of high school until you finish your college education, or work full-time throughout the school year and attend college part-time or online.
  • Apply for federal and state grants by submitting the Free Application for Federal Student Aid (FAFSA) for each year that you plan to attend college—the FAFSA opens October 1 of each year. Applying is free, and all US citizens and permanent residents are eligible.
  • Apply for scholarships throughout the year. Apply for scholarships offered by colleges you are applying to or currently attending, apply for local scholarships in your community, and apply for private outside scholarships available from companies and organizations. ScholarshipOwl can help you with that. Through advanced artificial intelligence algorithms, ScholarshipOwl finds the right scholarship for you. You can get started on ScholarshipOwl by signing up for a free trial at
  • When you receive offers of admission from the colleges to which you have applied, stick to choosing the least expensive option. Compare financial aid and scholarship offers, and find out your total out-of-pocket costs. Select the most affordable option, and then keep applying to scholarships to try to cut costs even further. Decide not to take out student loans to make up the difference – make up the difference with the money you earned from employment and scholarships.

For more information and to get help from college finance experts, visit

Jennifer Finetti

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