As noted in our post last spring, the CARES Act provides some relief for those repaying student loans. According to the Federal Reserve, the average monthly student loan payment ranges from $200 to $300 and in 2010, the total of student loan debt surpassed auto loan debt and credit card debt. Clearly, student loan debt affects many families, and the automatic suspension of principal and interest payments on qualifying student loans through September 30, 2020, as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, has been a boon for those whose loans qualified.
If you are financially able to make payments on your student loans, however, it would save you money in the long run. Any payments you make between March 13 and September 30 will be applied directly to principal! This will help you pay off your loans faster and reduce interest cost.
If you are hoping to benefit from a student loan forgiveness program (such as those that might be offered in exchange for teaching or practicing medicine in under-served areas), there is more good news. The suspended payments count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.
If you wish to check on details of your student loan debt, you can check your information on the National Student Loan Data System at https://nsldsfap.ed.gov/nslds_SA/. Through this website, you will be able to review your Financial Aid information including, federal loans, grants, and current student loan status. You can find additional information about student loan repayment options on the Consumer Financial Protection Bureau website .
Keep in mind that as it stands now, suspended payments must resume beginning October 1, so start planning accordingly. You can find additional information about student loan repayment options on the Consumer Financial Protection Bureau website . In addition, any updates from the federal government will likely be posted at studentaid.gov/announcements-events/coronavirus.
Today’s guest blogger is Mary Weinand, ISU Extension and Outreach Human Sciences Specialist in family finance, who serves southeast Iowa.