Help With Your Student Loans During the Pandemic

SPECIAL UPDATE: President Biden recently signed an executive order extending the provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act through January 31, 2022. This applies to all federally-owned loans (which includes your direct loans) and applies to loans from college and post-bac programs. The provisions referenced below are in effect from March 13, 2020 through January 31, 2022. 


First, the current interest rate on all federally-owned loans is 0%! That’s right, and that means your student loans are not accruing (building up) any interest while the CARES Act is in effect, but that’s only one of several ways the U.S. government is helping student loan borrowers during the COVID-19 pandemic.

Second, the government has also suspended payments on student loans through January 31, 2022, thanks to the recent extension. For example, if you’re in a gap year and were making regular monthly payments on your student loans, you are no longer required to make those payments until February 2022, and there is no interest building up during that time since the rate on your loans is 0%! Your online account with your loan servicer probably shows a status of “administrative” or “emergency” forbearance right now for any loans that were previously in repayment but whose payments have been suspended, thanks to this provision.

Third, it gets even better! If you are enrolled in the Public Service Loan Forgiveness (PSLF) program and were making payments with an income plan on your direct loans while working full-time for a non-profit organization, the period of time you don’t have to make your student loan payments still counts toward your PSLF eligibility, as long as you are still working full-time for that organization.

Just like they did when the CARES Act went into effect, you can expect your loan servicer to contact you before these provisions expire, so watch your mail carefully for updates. As responsible borrowers, you can also reach out to your loan servicers yourselves to be sure you know what to expect when your loans come due again.

Always keep good records of your student loans, most certainly during this unprecedented time, and please do not get complacent regarding responsible borrowing and responsible repayment due to this extension! 

 

Stay safe!


Visit our Financial Aid Advice section of the ADEA GoDental dental blogs for more guidance.