Answers to CARES Act Questions and your Student Loans
The government has responded in many ways to the COVID-19 pandemic with the passing of the CARES act. It included a tax rebate for many individuals and loans to small businesses. Another major move was providing relief from student loans temporarily to all federal student loan borrowers. Some of these benefits include:
● Federal student loan payments suspension
● 0% interest on federal student loan payments
● Those in default with student loan debt collection can’t have their wages, Social Security, and tax refunds garnished
This is great news for federal student loan borrowers. However, there are many questions that people have regarding benefits. Let’s answer eight of the biggest questions that seem to be the asked the most.
How do I know that my student loans qualify for these benefits?
Your student loans need to be owned by the federal government and part of the Federal Family Education Loan Program. Private student loans that are owned by banks and credit unions are not applicable including those that were previously PLUS and Stafford loans. Perkins Loans are not eligible if they are owned by an institution. The best way to confirm that your student loans qualify is by asking your servicer.
How long is the Student Loan Payment suspension period for?
Federal student loan payments are suspended until September 30, 2020. The suspension period started on March 13.
What do I have to do to suspend my payments?
There is nothing that you need to do. Your servicer will suspend your qualifying student loan payments for you.
Are my student loans being paid for while they are suspended?
No. The federal government has temporarily suspended your monthly payment requirements until September 30, 2020. You will resume your monthly student loan payments once the suspension period is over. Interest will not accrue on your student during this time.
What happens if I have auto-debit payments that posted during this time?
Contact your loan servicer and they will verify that your loans are eligible to have your student loans suspended during this period. You can request that they provide a retroactive administrative forbearance.
If I continue making my student loan payments, how does it affect me?
If you are financially capable of continuing to make your student loan payments you can do so. Since the interest payments are suspended during this period, all your payments will go towards reducing the principal balance of your loan. In the long run, this will reduce your total repayment costs and you will pay off your balance faster.
What can I do about my private student loans?
Private student loans don’t qualify for the CARES Act relief. If you having problems paying them back, contact your private loan servicer to discuss what options they may have.
Is there any student loan forgiveness included with the CARES Act?
Among the benefits offered for student loan borrowers, there is not a student loan forgiveness option specifically tied to the CARES act. You may qualify for one of the federal student loan forgiveness programs so check information about their eligibility requirements.
Do you have other questions about how the CARES Act affects your federal student loans? Student Loan Medix is here to help with answers with a free, no-obligation consultation. Call us today at (480) 676-2289 to get started. You can also email Tracey at [email protected]