Will Student Loans Be Postponed Again?
In the wake of the COVID-19 pandemic, many student loan borrowers found themselves with an uncomfortable question: “Will student loans be postponed again?” To fully understand this question, it is important to consider the actions taken by the federal government so far to address the financial needs of students and graduates during the pandemic.
The Impact of the CARES Act
Perhaps the most notable action taken by the US government was the passing of the CARES Act. This act temporarily suspended student loan payments and put a 0% interest rate on all federal student loans, effective March 13th, 2020. This action was taken with the intention of providing relief to those most likely to be struggling with expenses during this difficult time.
Will Student Loans Receive Another Extension?
At this time, it is uncertain as to whether or not student loans will be postponed again. It appears that the US government is in no hurry to extend loan relief and many federal student loan borrowers have been encouraged to resume making payments, despite the substantial financial challenges many may still be facing. This message has been echoed in a statement released by the Department of Education, stating that “on October 1, the CARES Act student loan relief ended and the terms of exemption from payment, interest, and involuntary collection actions associated with it will expire. At this time, we are not offering additional student loan relief.”
Options for Those Struggling to Make Payments
Though it does not appear that student loans will be postponed again, there are still some options for those struggling to make their payments. Borrowers may opt to:
- Explore income-driven repayment plans: Income-driven repayment plans can provide relief by allowing you to make reduced payments or payment pauses depending on your income.
- Consolidate federal loans: Consolidating your federal loans can make it easier to manage your debt payments, as it allows you to have only one loan to focus on and it also comes with a 0% interest rate.
- Deferment or forbearance: Though these options should generally only be used when other options are not available, they can provide short-term relief from payments and interest.
Overall, it does not appear that student loans will be postponed again. While this is certainly not ideal for those already in precarious financial situations, borrowers can still explore other options for relief.
Borrowers should also seek advice from a trusted financial adviser if needed.
Will student loan payments resume after the current postponement expires?
Yes, loan payments will resume after the current postponement expires. However, it’s important to check with your loan servicer for more information about payment resumption and other loan-related updates.
Will student loan interest continue to accrue during the current postponement?
Yes, student loan interest will continue to accrue during the current postponement.