How to Join the “Student Loan Strike” When the Moratorium Ends

Since March of 2020, student loan borrowers haven’t had to pay a cent on their federal student loans. But with payments and interest charges set to resume after December 2022, the Debt Collective, a debtor’s union on a mission to “cancel debts and defend millions of households,” is calling on student loan borrowers to strike. 

The Debt Collective is not advocating that borrowers default on their loans, but rather wants them to get to $0 monthly payments “as safely as possible.” Although it acknowledges that not everyone will achieve a $0 monthly payment after the moratorium ends, it lays out several strategies for slashing your student loan bills. 

What Is a Student Loan Strike?

The Debt Collective is calling on the federal government to cancel all student debt — and it believes a borrower strike will help achieve its goal. 

“We believe this politicized act of refusing to pay is going to aid in the pressure on President Biden to cancel student debt,” Debt Collective Press Secretary Braxton Brewington told Student Loan Planner.  

The Debt Collective defines a striker as a borrower who pays nothing on their student loans each month for “a combination of economic and political reasons … [and] is committed to joining the fight for broad-based cancellation.” 

Although the Debt Collective doesn’t believe that a strike will put financial pressure on the government, it says it will send a message that borrowers won’t cooperate with student loan repayment. 

“I believe that debtors have power — that’s where my hope comes from,” said Brewington. “I do think large-scale debt cancellation is likely, because every day more and more Americans support it and are rising up to demand it.” 

At the same time, the organization emphasizes that it doesn't recommend defaulting (or purposely missing payments) on your student loans. 

“That isn’t any leverage,” said Brewington. “The federal government doesn’t need our student debt payments to function, so there’s no leverage in defaulting on your debt.” 

Defaulting on federal student loans also comes with a host of negative financial consequences, including, 

• Long-term damage to your credit. 
• Garnishment of your wages, tax refund, or Social Security benefits. 
• Getting sued by your loan holder. 
• Loss of ability to purchase or sell real estate. 

As you can see, defaulting on your federal student loans could hurt you a lot more than it hurts the government. But there might still be ways to reduce your loan payments, whether you want to participate in this strike or simply can’t afford full payments.  

4 ways to keep your student loan payments at $0

If you’re interested in keeping your student loan payments at $0 per month after the emergency forbearance ends, these strategies might help. Keep in mind, however, that reducing your student loan payments could mean that you’re in debt for longer and pay higher interest charges, as there’s no guarantee that large-scale student debt cancellation will occur.  

1. Apply for forbearance or deferment

While the government placed federal loans in emergency forbearance in response to the coronavirus pandemic, it also offers forbearance and deferment options for other reasons. Both programs allow you to pause payments temporarily, though interest usually continues to accrue. The only exception is Direct Subsidized Loans, which don’t collect interest during deferment. 

Although there’s some overlap between the requirements for these programs, deferment is typically better if you’re in school, the military or the Peace Corps. You might also qualify if you’re experiencing job loss or economic hardship. 

If you can’t qualify for deferment, you might still be able to put your loans in forbearance. Some qualifying reasons include financial hardship, medical bills, a change in employment or another reason that your loan servicer accepts. 

As mentioned, interest charges might accrue during this time, meaning you could face an even bigger debt balance when your forbearance or deferment ends. Make sure you’re comfortable with this trade-off before applying to one of these programs. 

2. Get your loans on income-driven repayment 

Another option for adjusting your student loan payments is applying for income-driven repayment (IDR). The four IDR plans are: 

• Income-Based Repayment (IBR)
• Pay As You Earn (PAYE)
• Revised Pay As You Earn (REPAYE)
• Income-Contingent Repayment (ICR)

All of these plans set your monthly payments at 10%, 15% or 20% of your discretionary income while extending your loan terms to 20 or 25 years. If you still have a balance at the end of this time, your balance will be forgiven. 

Depending on your income, your payment on an IDR plan could be as low as $0 per month. Note that your payments can increase if your income goes up, and you typically need to recertify your IDR plan on an annual basis. 

That said, borrowers who are currently on IDR will be able to keep their payments the same through at least 2023, since they’re not required to recertify their plans until November 2022 or later. 

3. Take advantage of the post-moratorium “safety net”

According to a February 2022 survey by Data for Progress and the Student Borrower Protection Center, one in two borrowers says they’re “not at all confident” about their ability to afford payments when the moratorium ends around August 30, 2023, unless the courts rule on lawsuits sooner than that. 

Politico reports, however, that borrowers might have some additional relief. In October 2021, it wrote that the Department of Education instructed loan servicers to create a three-month safety net for borrowers. If borrowers miss payments during that time, servicers aren't supposed to report it to the credit bureaus or place their loans in default. 

This safety net suggests that you could skip an additional three months of student loan payments without suffering the usual consequences of default. However, you’ll need to keep an eye on your accounts, as there’s no guarantee that your loan servicer will honor this grace period. 

4. Pursue loan forgiveness or cancellation 

Finally, you might be able to get rid of your student loan balance completely through loan forgiveness or cancellation. Borrowers who were defrauded by their schools, for instance, could pursue loan cancellation through borrower defense to repayment.

Federal student loan holders who work in public service could also pursue the Public Service Loan Forgiveness program, which forgives debt after 10 years.

There are a number of loan forgiveness and repayment assistance programs out there, as well as an increasing number of companies offering student loan benefits to employees. It could be worth exploring your options to see if you qualify for any of this debt relief.