Depending on the loan you have, however, you may be eligible for instant relief for the next few months. COVID-19 made it challenging to pay almost any bill for many people around the world. Due to job layoffs and income loss, many have been forced to prioritize bills, with housing and food sitting at the top of the list as human necessities.
Although paying your student loans may not be a matter of survival, being late on payments could ruin your credit and cause other financial issues down the line. That’s why it’s good to know that you may not have to pay your loans right now, if a specific entity holds them.
Student Loan Relief Due to COVID-19
If you’ve watched the news recently or have seen a nice bump in your bank account, you probably know that the CARES Act has served as a bit of a financial Band-Aid in response to the coronavirus outbreak.
Signed on March 27 of this year, the CARES Act offered up financial relief in the form of $600 per week unemployment assistance plus $1,200 stimulus payments to those who were laid off or met specific income requirements.
What about student loans, though? Did the CARES Act address the financial stress they bring when income and employment are hard to come by? It sure did, but not for all borrowers.
Under the CARES Act, those with federally-held student loans can enjoy suspended payments through an automatic administrative forbearance. This suspension of payments runs from March 13, 2020, to September 30, 2020.
Can you continue to make payments to pay down your student debt during this window? As long as you have the means to do so, you absolutely can.
Not having to make payments on your student loan until September 30 isn’t the only relief provided to borrowers under the CARES Act. If you qualify, you can also enjoy zero-percent interest on your loans during the same window.
How to Qualify for CARES Act Student Loan Relief
As stated, federally-held student loans are the only ones that qualify for relief from the CARES Act. The U.S. Department of Education must own them. Such qualifying loans include:
- Direct loans that are defaulted or non-defaulted
- Federal Perkins loans
- HEAL loans that are defaulted
It’s worth noting that Perkins loans owned by the institution you attend, as well as FFEL and HEAL loans owned by commercial lenders, do not qualify. Once again, they must be owned by the Department of Education. Private loans are not eligible, either.
How to Get CARES Act Student Loan Relief
As long as your student debt meets the CARES Act requirements, you do not have to do anything to receive zero interest and suspended payments.
The relief officially kicks in on March 13, 2020, and will be automatically applied to your account.
If your loans are not eligible for relief, contact your loan provider to see what they are offering in response to the coronavirus pandemic. Many will be willing to work with borrowers to help them through these tough times.