Do I Have To Pay My Student Loans During The Coronavirus Quarantine?
Drew Koven Court Buddy Board Member
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Image by 3D Animation Production Company from Pixabay
If you’re like most young adults, you have some debt from your years in college. The average amount owed, among students who graduated in 2018, is $29,200, according to the Institute for College Access and Success.
That means that these young adults were paying just over $300 per month, depending on their interest rate and the length of their repayment plan, when the Coronavirus hit.
Many of these people suddenly found themselves out of work, or working less. Or they found their budgets stretched thin for a variety of reasons, including:
- Having partners or roommates who lost jobs and need help paying their part of the rent or mortgage
- Paying for the care of loved ones who are sick, or suddenly out of school or daycare
To help student loan borrowers, Congress and President Trump signed the CARES Act into law.
The Act was designed to help many Americans, including:
It also provides offers relief for federal student loan borrowers. Here are the main things you need to know about your student loans:
Student Loan Payments will automatically stop from March 13, 2020, through Sept. 30, 2020
To help student loan borrowers during the COVID-19 emergency, federal student loan borrowers are automatically being placed in an administrative forbearance, which means you can temporarily stop making your monthly loan payment.
You will not have to pay until the end of September.
During that time, interest will not accrue.
The best part? You don’t even need to go online or pick up your phone to ask for a pause in payments. It will happen automatically.
You can still make student loan payments if you choose to, however.
If you can pay those loans, do it though. The interest rate on all student loans has been reduced to 0% until the end of September.
At that point, interest rates may increase.
So if you can keep paying, do it. You’ll be saving money in the long run.
This all depends on what type of student loan you have, however.
The CARES act only applies to those who have federal student loans.
If you are not sure if you have a federal loan, go to StudentAid.gov to find out.
If you discover that you have a private student loan, which isn’t covered by the CARES Act, contact your lender or servicer.
They’ll likely offer you a similar deal.
Some states have already done the hard work for you, and worked out plans with private student loan lenders that will give you the same protections the CARES Act provides for federal loans.
Remember that the situation and laws are always changing.
Just as the Coronavirus spreads fast, laws are changing fast.
Here are some great places to see the latest status on student loan laws.
- The Consumer Financial Protection Bureau FAQ
- The Student Borrower Protection Center