Federal student loan payments will resume next month, forcing thousands of Minnesotans to rethink their finances after a three-year pause during the coronavirus pandemic.

More than 800,000 Minnesotans have federal student loan debt worth a combined $27 billion. But many also hold state and private loans, leaving Minnesota graduates who earned a bachelor's degree between mid-2020 and mid-2021 with a median of nearly $24,000 in debt, according to data from the state's Office of Higher Education.

As the October deadline for repayment looms, Kim Miller, a financial counselor with Lutheran Social Service of Minnesota, has seen a noticeable uptick in the number of people calling for advice. The U.S. Supreme Court this summer dashed some borrowers' hopes that thousands in debt would be forgiven, but federal officials have also unveiled a slew of new programs since the pause began. And many callers, Miller said, are seeking assurances that they're enrolled in the right options.

"I think after the Supreme Court struck down the one-time debt relief, I think it really kind of drove the point home that repayments were beginning and that people had to start taking those steps and working through all the emotions and feelings involved around that," Miller said.

Emma Gabbert, 23, delayed buying a car, even though it would make it easier for her to get to and from her master's program at Metro State University in St. Paul. She's still waiting to hear whether she'll be allowed to postpone payments on her undergraduate loans or get them reduced while she's enrolled in the program.

"It's definitely weighing heavily," she said.

John Runningen, 22, a recent graduate of Minnesota State Community and Technical College in Fergus Falls, is putting off plans to enroll at a university until the state launches a new free college program next year for students meeting certain income requirements. In the interim, he expects to pay about $150 per month on his loans and has taken on two new delivery gigs on top of his work with AmeriCorps and LeadMN, an organization representing Minnesota State college students.

"It's not something new to me as a first-generation [college] student to have to worry about the stressors of making this decision," he said, adding that he hopes there one day will be more resources to help students navigate the confusing world of college finances.

Why were student loan payments paused?

Shortly after the first COVID-19 cases were recorded in the U.S. in March of 2020, then-President Donald Trump paused payments on federal student loans, citing the economic hardships caused by the pandemic. The plan also temporarily set interest rates at 0%.

President Joe Biden's administration extended the pause multiple times. But earlier this year, he agreed to resume payments while negotiating a deal with Congress to address the nation's debt limit.

Interest on federal student loans began accruing again in September, and most borrowers will be expected to resume payments in October.

What should I do to prepare for making payments again?

The U.S. Department of Education says borrowers should start by making sure that their contact information is updated both at StudentAid.gov and with their loan servicer. Department leaders suggest that people consider enrolling in auto pay to save 0.25% on their interest rates. People who were using auto pay before the pause took effect likely need to re-enroll.

Borrowers should receive bills at least 21 days before payment is due.

What if I can't afford to make payments?

The U.S. Department of Education is encouraging borrowers who need lower payments to consider applying for the new Saving on a Valuable Education (SAVE) plan, which calculates payments based on their income. A single borrower who earns less than $15 per hour won't have to make any payments, and the department estimates that many other borrowers could save more than $1,000 per year. Nearly 74,000 Minnesota borrowers had enrolled in the program as of earlier this month. That application is available at StudentAid.gov.

The Biden administration said it will provide a "temporary on-ramp period" through Sept. 30, 2024. During that time, it will not place borrowers who miss payments in default or refer them to debt collection agencies. However, the U.S. Department of Education cautions that payments will still be due, interest will still accrue and "we do not control how credit scoring companies factor in missed or delayed payments."

What's happening with debt forgiveness?

Biden, a Democrat, unveiled a plan last year that would have forgiven up to $20,000 in federal student loan debt for borrowers making less than $125,000 per year. But the U.S. Supreme Court struck down the program this summer, siding with borrowers and Republican attorneys general in six states who argued it had been created using inappropriate procedures.

The Biden administration has promised to work as quickly as possible to provide a new debt relief program and held a hearing this summer to gather input.

In the interim, the U.S. Department of Education is encouraging people to continue making loan payments and to look at whether they might qualify for loan forgiveness through other programs, including some for people working for nonprofits or government agencies.