Interest has not accrued on federal student loan debt since March 13, 2020. No payments have been due since the passage of the CARES Act later that month. We are coming up on 3 years of no payments and interest. Yet the student loan payment pause has been extended again.
I was unsure how long the pause would extend. I expected most of the extensions until this past summer. But the last two extensions were a bit of a surprise. And now, the student loan payment pause now extends until June 30, 2023.
The Problem with the Student Loan Payment Pause
As I have worked with my coaching clients, I’ve emphasized the point that at some time, these payments will come back. This pause will not last forever.
Especially since it seems like the attempt to “cancel” a portion of many borrowers’ balances by executive order is doomed in court, this makes the resumption of payments all the more inevitable.
While there are many borrowers who feel like they cannot make their payments, there is another side of this coin. Other borrowers, including many of the clients I work with, have become used to not making their payments.
The student loan payment pause has acted as a form of “student loan forgiveness” without actually wiping out the balance that is due. So there is the appearance of relief, but al that’s happening is pushing out the responsibility in the future.
And by that time, adjusting to making payments again will be much more difficult. It will almost feel like you have added a new debt to your financial situation.
The Most Recent False Hope on Student Loans

Add on top of this debacle, the Department of Education sent out notices to millions of Americans that their balances were approved for student loan debt cancelation who actually did not qualify.
This is yet another example of why I so strongly advise against relying on the government to solve personal financial problems. The politicians and bureaucrats in Washington have their own agenda, and oftentimes that involves using our troubles as political capital.
While this makes for great electioneering, it makes for poor financial planning. If we make our financial decisions based on the whims of Washington, we’ll be in a state of constant limbo.
In spite of their games, my advice is to start taking control now.
So, What’s the Alternative?
You don’t have to let the payment resumption catch you off guard. You can choose to attack this head-on and take control of your financial destiny. There is no greater agent of change in your own life than you.
Life’s difficulties can be something you confront voluntarily on your terms, or something that confront you involuntarily on other terms. You get to decide.
With the Millionaire Mindset, here are some of the options that I am presenting to my coaching clients while the student loan payment pause is still in effect.
Pay Off Student Loan Debt Starting Now

This is a great time to attack your student loans with a vengeance. After all, interest is not accruing. So all payments you make go to the principal balance, as opposed to how payments normally get distributed (between principal and interest).
If you have not been making payments during this student loan payment pause, imagine if you had been. Perhaps during the initial months of lockdowns, you were out of work and legitimately couldn’t make payments. But let’s say you started making payments again 6 months later.
From September 2020 to December 2022, that’s 26 months. The average student loan payment is $393 per month (let’s call it an even $400). Twenty-six payments of $400 is $10,400.
While there is normally amortization for interest, that would have all gone to the principal. With the average student loan debt balance being nearly $40,000, that’s about one-fourth that you could have paid offf just by making the minimum payment.
If you made double payments, that’s $20,800 that would have been gone. And if you could squeeze out $1,200 monthly, that would have been $31,200 knocked off.
There is still the opportunity to reduce what you will pay in interest over these next seven months. By getting the principal balance down now, you will be out of debt faster and have more money back in your pocket in the future.
Make Payments on Other Debts that Still Have Interest Accruing
The other option I would suggest is to attack debts that have interest accumulating. This can include your credit cards, personal loan, private student loans, vehicle notes, etc.
Though some banks and lenders gave some grace in 2020, the federal student loan pause did not apply to any other type of debt. So for most of the past 3 years, we’ve still had to make payments on our other accounts.
If you want to make a dent in these debts, you can use the amount that would have been your student loan payment during the pause to knock out other debts more quickly.
I recommend using the debt snowball method. I discuss how to make it, and a few other plans, work in this article here. The idea is that you make all minimum payments except on the smallest debt, and attack that smallest debt as aggressively as possible.
If you paid an extra $400 on your smallest debt, odds are you would pay it off fairly quickly. And that’s even accounting for the interest.
Once the student loan payment pause is over, you’re in a far better position to resume those payments because you have fewer things to pay on by that time.
Closing Thoughts on the Student Loan Payment Pause
These payment pauses have allowed tens of millions of Americans to pretend that they don’t have to pay their student loan debt back. I’m not trying to burst any bubbles here, but that’s not a realistic manner of handling your finances.
As I stated before, you’re the one who gets to determine what your financial destiny will be. Take control of it starting today, and base your decisions on your values and goals instead of policy decisions made by politicians and bureaucrats.
You’ve got what it takes if you put your mind to it. If you need help, book a free Discovery Session with me to discuss how you can power your way to financial freedom starting now.