On March 27, 2020, the president signed the CARES Act into law, which, among other things, provides broad relief for federal student loan borrowers. So, what does this all mean for you? To help you better understand we compiled some questions and answers to help you better understand and see how this can actually help you get ahead.
From March 13, 2020, through September 30, 2020, the interest rate is 0% and payments are deferred on the following types of federal student loans owned by the U.S. Department of Education (ED):
- Defaulted and non-defaulted Direct Loans
- Defaulted and non-defaulted Federal Family Education Loan Program (FFEL) Loans
- Federal Perkins Loans
How can I take advantage of this 0% interest period?
Since your loan(s) aren’t accumulating any interest this means every payment you still make until September 30, 2020, will be applied directly to the principle, thus paying off your student debt faster.
No student loan payments for six months, really?
Yes, this is correct. From March 13, 2020, through September 30, 2020, you will not be required to make a student loan payment. If you have it set up on automatic withdrawal, your payments will no longer be taken until after September 30, 2020.
If I still want to make a payment on my student loans, how do I do that?
We encourage you to still make payments if you can to help pay off your loan faster. If you still want to make your regular payments and keep the process going like normal, contact your loan servicer to opt-out of the administrative forbearance, and your auto-debit payments will resume. You also have the option to remain in the administrative forbearance and make manual payments during the administrative forbearance period. Visit your loan servicer’s website to make a payment or contact your loan servicer for more information.
Can I make a partial payment towards my loans and save some money?
Yes, as long as you are in forbearance, you will not be penalized for making a payment that is less than your usual monthly payment. This means you can put the extra money towards other debt (credit cards, auto loans, personal loans, etc) or put it into your savings account.
This is the perfect time to make your student debt work in your favor by making principal payments to pay off our loans faster or using the extra money to put into your savings account. If you need help or have more questions, feel free to contact us via chat, or give us a call at (636) 916-8300. We are still here and ready to help.
Until next time,