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Following a pause that began in March 2020, an announcement was made that borrower will be resuming federal student loan payments beginning late January 2022. While millions of borrowers were able to defer payments over the last year and a half, hopes of a broader student loan forgiveness plan have not come to fruition.

As this payment pause ends, both employees and employers must prepare for the effects and difficulties that come with working to pay down debt once again. Here’s what you should know about the potential effects of these resumed payments on your employees and how a financial workplace wellness program may be able to help.

Effects of Resuming Federal Student Loan Payments on Employees

The most prominent effect of resuming student loan payments is likely to be a return of significant stress for many workers. Like other forms of debt, student loans can take a substantial mental toll on debtors. In some cases, the effects of this stress can even manifest themselves as physical symptoms. For example, muscle soreness, insomnia and stomach pains are among the common physical effects of chronic stress. On the mental side, those struggling with stress often have difficulty focusing and may experience depression or anxiety.

Employees who must resume servicing their debts will also once again have to cope with financial instability. The average student loan borrower owes about $37,000 and pays just under $400 each month toward that debt. Far from a simple budgeting issue, the financial distress of these loans often forces those who hold them to delay major life decisions. Marriage, home buying, and family planning are among the extensive list of decisions that modern workers frequently put off while trying to pay down debt.

As you might expect, the stress and hardship that come with student loan debt aren’t confined to employees’ personal lives. Workers with high levels of student loan debt are frequently distracted and generally have poorer job performance than those who are more financially stable. The mental and physical toll of debt-related stress also causes heavily indebted workers to take more sick days. With resuming federal student loan payments looming, employers may experience reductions in productivity and higher rates of worker absenteeism as a result.

Another likely effect of resuming payments is higher levels of turnover as employees look at other job options. Young workers with high student loan debts are known to change jobs every few years, often searching for higher salaries or student loan repayment programs from new employers. Yet, test programs for student loan paydown benefits suggest that these programs actively improve employee retention. With a tightening labor market and more employers beginning to offer generous tuition and student loan assistance programs, businesses should expect to see an increase in job-hopping behavior among younger workers.

Use these great resources if you qualify.  Check out www.studentaid.gov  for more information

Teacher Loan Forgiveness

Are you a teacher?  If so and  you have taught full-time for five complete and consecutive academic years in certain elementary or secondary schools or educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on eligible federal student loans. Get the details about Teacher Loan Forgiveness here.

Income-Driven Repayment (IDR) Plan

Income matters and if you repay based upon income, any remaining balance on your student loans may be forgiven after you make a certain number of payments over a certain period of time. Learn more about IDR plans and how to apply.

Public Service Loan Forgiveness (PSLF)

Do you work full-time for a government or not-for-profit organization? You may qualify for forgiveness of the entire remaining balance of your Direct Loans after you’ve made 120 qualifying payments.  That is about 10 years of payments.  To benefit from PSLF, you should repay your federal student loans under an income-driven repayment plan.  

Military Service

Thank you for your service.  There are special benefits and repayment options for your student loans available from the U.S. Department of Education and the U.S. Department of Defense. Benefits include interest rate caps under the Servicemembers Civil Relief Act and Department of Defense student loan repayment programs. Federal student loan benefits for members of the U.S. armed forces.


The Segal AmeriCorps Education Award is a benefit received by people who complete a term of national service in an approved AmeriCorps program.  These include AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National. After you successfully complete your service, you are eligible to receive a Segal AmeriCorps Education Award, which can be used to repay qualified student loans.

Don’t qualify for any of these? You’ll want to check out the “Student Loan Forgiveness” page for information about other types of loan forgiveness that might be available if you meet certain conditions.

How Can a Financial Workplace Wellness Program Help?

To cope with the problems presented by resuming federal student loan payments, employers can look to financial workplace wellness programs to elevate benefits packages. Financial workplace wellness programs seek to help employees make the most of their salaries and benefits. These programs focus on education and financial planning, and they make employees aware of useful financial tools and resources.

101 Financial Workplace Wellness is an excellent way to support your employees’ goals. Whether an employee wants to pay off debt, build credit, or begin saving for retirement, they can use the education offered by our wellness program to make a positive change. 

101 Financial Workplace Wellness boosts employee engagement and retention by helping your workers achieve life goals while pursuing their careers at your company. Get in touch with our team to learn more about how we can help your employees navigate the end of the payment pause.