Coronavirus has had a major impact on your student loans, including student loan repayment. The good news is that the federal government and private lenders offer student loan relief to help you through the Covid-19 pandemic.
Here are some options for student loan relief:
Federal Student Loans: Student Loan Relief
- Pause federal student loan payments
- Waive interest on federal student loans
- Halt collection of student loans in default
Importantly, this student loan relief is temporary in response to Coronavirus. Under the Cares Act, student loan relief lasted from March through September 30, 2020. However, President Donald Trump extended this student loan relief through December 31, 2020. Effectively, this means that you are not required to make federal student loan payments during this period. That said, you can still pay your federal student loans in the normal course. Further, no new interest accrues on your student loans. Finally, if you are in student loan default, your income tax refund, Social Security payment or wages cannot be garnished or seized to pay off student loans. This period may be a good time for you to get out of student loan default.
Does student loan relief include all federal student loans?
Is student loan forbearance automatic?
Can I still make student loan payments during Coronavirus?
Who do I contact if I have questions about student loan forbearance?
Private Student Loans: Student Loan Relief
While the Cares Act only applies to federal student loans, many private lenders are offering student loan forbearance that is similar to federal student loan relief. For example, some private lenders will postpone student loan payments for up to 12 months.
Student Loan Refinancing
Should I refinance student loans during Coronavirus? It’s a popular question that student loan borrowers ask.
Student loan refinancing is another option during Coronavirus. Student loan refinancing helps you save money, get a lower interest rate and pay off student loans faster. You can refinance private student loans, federal student loans or both.
Should you refinance federal student loans during Coronavirus?
The choice to refinance student loans is unique to your personal goals and circumstances. Since federal student loans are paused temporarily, some borrowers prefer to benefit from student loan forbearance and refinance private student loans only. Other borrowers, however, recognize that student loan forbearance is temporary, and don’t want to pay their regular interest rate when student loan relief ends. Therefore, these borrowers prefer to refinance both their federal and private student loans to lock-in a lower interest rate.
Student Loan Relief: States
Student Loan Forgiveness: Coronavirus
If you want to explore potential options to cancel student loan debt during Covid-19, there are options. Most student loan forgiveness programs apply to your federal student loans and are through the federal government. Your student loan servicer can provide more information on potential options. Student loan forgiveness is offered through income-driven repayment plans, the Public Service Loan Forgiveness program and Teacher Loan Forgiveness program, for example. That said, there is no immediate plan from Congress to cancel all student loan debt.
Final Perspective: Student Loan Relief
Your student loan servicer can help you with income-driven repayment plans, student loan payment questions and student loan forbearance, for example. Contact your student loan servicer to discuss potential options. Student loan refinancing is a separate process with individual lenders. During Coronavirus, it’s important to understand all your options so you can make an informed decision to manage and pay off student loans in the best way possible.