Nearly 45 million Americans—about 1 out of every 5 adults—are carrying some form of student loan debt. At the start of the COVID-19 pandemic, the CARES Act aimed to help those in debt by suspending payments, stopping collections, and waiving interest on all federal student loans until September 30, 2020. In August, that deadline was extended to December 31, 2020. This deadline is just a few weeks away, so what’s the most important thing you can do right now to prepare?
Talk to your loan servicer.
Your loan servicer can help you navigate a wide range of challenging financial scenarios and can help you discover programs that you might not even know existed.
For example: many people are still out of work, or experiencing significant financial hardships due to the pandemic. If you are in this situation, your servicer can help you determine if you qualify for the range of administrative resolutions available to you, such as an income-driven repayment plan, forbearance, deferment, loan consolidation, or refinancing.
Contacting your servicer is particularly important if you graduated or left school during the pandemic. Most student loans offer a six-month grace period before the first loan payment is due; thanks to the CARES Act, those payments will not start until the new year, regardless of whether or not your grace period has expired. Still, your servicer can help you plan now by calculating what your loan payment will be, and provide options to you if you don’t think you’ll be employed by January 2021.
While private student loans don’t always have the same repayment options as federally-backed loans, there are similar programs available to those experiencing financial hardship, depending on your lender. Your servicer can help you with these as well.
Finally, if you are lucky enough to be able to afford your student loan payments: keep paying! Your loans are currently accruing zero interest, which means your payments are being applied directly to the principal of the loan, which means you can really shave some time off of your repayment schedule and be free of your debt even sooner.
IonTuition’s concierge loan counselors can help you design a repayment strategy that fits your life, and they’ll connect you with your service and stay on the call to implement your new repayment plan. Give us a call today.