Managing Student Loan Debt During The Pandemic
There’s no denying the enormous economic impact the Covid-19 pandemic is having on American households. Keeping up with fixed expenses such as mortgage payments, electric bills, and car payments has become a major stressor for many. For some, companies are willing to extend due dates, lower interest rates, or even discount the amount owed. That being said, what options are there for student loan borrowers to help during this pandemic? Fortunately, there are options whether your loan is Federal, Private, or through your employer.
Federal Loans and The CARES Act
In March of 2020, President Trump signed The CARES (Coronovirus Aid, Relief, and Economic Security) Act. For most federal borrowers, this means automatic forbearance began March 13th and continues through September 30th, 2020. Borrowers can also contact their service providers to see if they qualify for refunds dating back to March 13th, 2020. Of course, if you’d like to continue making payments through September 30th, you can do so interest free with your payments going towards the principle balance.
The majority of students with private loans obtained them with the help of a cosigner. Many private loan servicers will work with students on repayment and many have hardship relief available if you ask. It is just as important for the cosigner to call the service provider as it is for the borrower. It is very important to ask your loan servicer questions and if you come to an agreement, don’t forget to request a copy of the agreement in writing. It is also important to mention that some servicers will release the cosigner, so long as payments have been on time and other conditions are met.
Employer Contributory Loans
Through January 21st, 2021, employees will not have to pay taxes on employer contributions to student loans. In fact, employers who offer this benefit to their employees will receive a tax break per the Stimulus Bill.
How to Figure Out What Type of Loans You Have
The first thing to do is to check your credit report. All three major credit bureaus, Experian, Transunion, and Equifax are providing free weekly credit reports through April 2021. Your credit report will list your student loan servicer or provider and you can also see if there are any errors on your credit report. Another option is to call the Federal Student Aid Information Center. This way, you can ask them if your loan is a federal loan and what the status of your loan is.
Check with Your School
The Department of Education recently issued billions of dollars in emergency relief grants and other forms of financial aid to help students with the costs of classes, materials, books, and even childcare. While this won’t help with current loans, it can help students to continue their education. While you may or may not qualify, it is worth a phone call to your school’s financial aid department.
If you or a family member is struggling under the crushing weight of student loan debt, you need help. Dsouza and Strachan Law Group has the knowledge and experience to help you navigate this seemingly insurmountable debt. Contact Dsouza and Strachan today for a free consultation.