The student loan repayment pause will end this year. Repayment is likely to resume in September or October. The Supreme Court will make its decision on the Biden Administration’s one-time student loan forgiveness program next month. Student loan repayment will resume a minimum of 60 days after the decision.

Whether or not forgiveness passes, borrowers will need financial support to handle monthly payments again after a three-year pause.

Colleges should implement a default aversion plan now to help their student borrowers prepare for repayment. Borrowers have the opportunity to plan ahead so they don’t fall behind.

Here are three default guardrails colleges can put in place today before repayment resumes.

1. Take Advantage of Income-Driven Repayment (IDR) Plans

The Education Department released a fact sheet earlier this year on suggested improvements to the popular income-driven repayment (IDR) plan program. IDR plans tie payments to the borrower’s income. Borrowers with lower incomes have lower monthly payments. Some payments may be as low as $0 per month. No payment in IDR is ever more than the Standard repayment plan.

Also, IDR plans include paths to forgiveness. Under the new guidance, borrowers with less than $12,000 in loans could have their balances erased after 10 years.

Certifying income is required to apply for and maintain an IDR plan. ION helps borrowers with the IDR process. Schools should help their borrowers enter IDR plans before repayment resumes.

2. Use a Qualified Third-Party Servicer

Title IV-eligible institutions regularly partner with Third-Party Servicers (TPS) to help their students with federal financial aid funds. The Education Department issued a Dear Colleague letter outlining new requirements and responsibilities for a TPS.

Federal student loan servicers have had their budgets cut and are reducing staff and hours. For borrowers, this will result in long wait times to connect to their servicer and delays in processing paperwork. Worse, borrowers may abandon their call and end up delinquent on their loans.

A TPS such as ION will be helpful to those borrowers by expediting repayment changes and avoiding hold times with Federal servicers. Third-party servicers help Federal servicers handle the volume of calls from borrowers.

Offer Online Student Loan Management Tools

Student loan repayment is complicated. The average borrower doesn’t understand the complexities of their repayment plan options. Most borrowers have multiple disbursements with varying interest rates, occasionally from multiple servicers. Their student loan statements can become overwhelming.

And if their servicer changes, which many have, they’ll have even more difficulty keeping up with their payments.

Having an online student loan management tool that aggregates their loan data, guides them through repayment plan options, and notifies them of any changes to their account becomes a powerful guardrail to keep borrowers on track.

ION offers everything institutions of higher education need to keep their cohort default rates down. Contact to request more information.