Recently, President Trump signed an executive order extending enhanced unemployment benefits, implementing a payroll tax cut, providing assistance to homeowners and renters, and providing relief to student loan borrowers.
What should people know concerning their student loans?
The President signed an executive order to provide relief to student loan borrowers. This order mandates that student loan borrowers are not required to pay on federal student loans through the end of this year. In addition, borrowers will be able to benefit from 0% interest rates during this same time.
How does this differ from the previous CARES Act passed in March?
The Cares Act provided relief to student loan borrowers at an interest rate of 0%. However, this was expected to expire on September 30, 2020. Also, the Act provided an automatic forbearance, which meant that borrowers were not required to make payments during this time.
What if a student loan borrower does not have a federal loan?
If a borrower does not have a federal student loan, they will not qualify for the automatic forbearance or interest reduction. However, many student loan providers are working with borrowers to ensure they obtain some form of relief. As such, it is a good idea to contact your company to determine which options may be available to you. There is also a great resource on Nerdwallet’s website that provides information about what each company is doing.
If you desire to continue to pay your student loans and qualify for the automatic forbearance and interest rate reduction, this is the time to do so. Maintaining these payments can reduce your balance faster since interest is not accumulating on accounts.