Over 5.2 million student loan borrowers are in default. The CARES Act has several provisions to help struggling borrowers. Defaulted borrowers have a reprieve from wage garnishment and tax offsets until October 1st 2020.
What happens October 1st?
Wage garnishment and tax offsets will resume on October 1st 2020. There is still time to work with IonTuition to get out of default. IonTutition advisors can enroll borrowers into the federal Loan Rehabilitation program, which would allow credit for monthly payments until September 30th, without having to spend any money. Loan Rehabilitation typically takes nine months of monthly payments to remove a default status. If you begin immediately, you can be several months ahead when payments begin again in October.
What if I’m already in Rehabilitation?
You will need to begin making payments according to your rehabilitation program on October 1st. It’s a good idea to plan for a long-term solution once your repayment status is restored. You can explore repayment option using IonTuition’s scenario planning tools such as “Lower Your Payments” calculator. Once you find a repayment plan that fits your household’s financial situation, reach out to an IonTuition advisor to help you enroll.