Are you wondering what the CARES Act means for you and your student loans? We’ve got the breakdown here for you of what you need to know. Many benefits have been placed into effect for your federal student loans through September 30th, 2020, and we’ve listed below the key points for you:
- You do not have to make payments on qualifying federal student loans for this six-month period. If you are unable to make payments, you will not face any fees or negative effects to your credit.
- No interest will accrue on your federal student loans during this timeframe.
- Involuntary collection of student loan debt is suspended. During this timeframe, garnishment of wages, tax refunds, and Social Security benefits will not ensue.
- If you’re currently making payments towards loan forgiveness, these skipped payments still count as qualifying monthly payments.
- They also count as payments towards a rehabilitation program.
If possible, you can continue to make your monthly payments. Since your loans will not be accruing interest, full payment will apply to your principal, resulting in your loans paying down faster.
If you’re unsure of the type of loans you have or whether they qualify, make sure to contact your loan servicer or go to their website for more information.
What does not qualify through the CARES Act?
*If you have FFEL or Perkins loans that are owned by commercial lenders or by the institution you attended, they are not currently eligible for these benefits. However, you can contact your lender or institution directly for any options they may have available.
Keep in mind that private student loans are also excluded from these benefits. If you are struggling with your private loans, you will need to contact your lender directly for assistance.