Here’s How To Get Financial Relief For Student Loans During Coronavirus

How do you get financial relief for your student loans in the wake of Coronavirus?

Here’s what you need to know?

Student Loans

Even if you have read the latest headlines about your student loans, you may still want answers to the most popular questions about your student loans and Coronavirus. The first step is to understand that there is financial relief, but your federal student loans and private student loans are treated differently. Let’s start with federal student loans, which are student loans issued by the federal government and include Direct Loans such as Stafford Loans, for example.

The CARES Act — which is new legislation that includes a $2 trillion stimulus package to provide financial relief due to COVID-1 — has major changes regarding your federal student loans, including, among other benefits:

1. No federal student loan payments

2. No interest on your federal student loan payments

3. No garnishment of wages, Social Security and tax refunds

Public Service Loan Forgiveness

If you are pursuing public service loan forgiveness, pay attention. There is a ton of confusion right now about whether you can pause your federal student loan payments and still have them count toward your required 120 monthly payments. Yes, you can pause student loan payments and not kill your chances for student loan forgiveness. However, if you visit certain student loan servicer websites, or even contact your student loan servicer, you may be told different information. These websites have old information regarding President Donald Trump’s initial announcement that he would enact the following: interest waiver for federal student loans, suspension of federal student loan payments and no garnishment of wages, Social Security benefits or tax refunds for 60 days.

Income-Driven Repayment Plans

If you’re struggling with your federal student loan payments, you can also enroll in an income-driven plan. There are four main plans: IBR, ICR, PAYE and REPAYE. Your monthly payment is based on your discretionary income, family size and state of residence. With income-driven repayment, your monthly payment can be as low as $0. If you already have an income-driven repayment plan, and your income has changed due to Coronavirus, contact your student loan servicer to update your income.

Private Student Loans

If you have private student loans, the CARES Act does not provide the same financial benefits. However, there are strategies to help you with your private student loans. For example, many private lenders allow you to pause your private student loan payments. This is different than suspension of federal student loan payments because interest may still accrue on your private student loan balance. However, if you don’t have to make monthly payments, this may provide some temporary financial relief. Contact your lender or student loan servicer to inquire about pausing temporary payments due to financial hardship, for example. However, make sure you understand the financial trade-offs by agreeing to pause payments for private student loans.

Helpful Resources: What To Do With Your Student Loans

More Options For Your Student Loans

What else can you do to pay off your student loans more quickly and save money during this challenging period? Here are four options, all of which have no fees: