Managing Your Student Loan Debt in a Time of COVID
Along with the celebration, it’s also a time to understand what it takes when managing student loan debt through a challenging time.
It’s a reality that student loan debt will impact recent graduates. In fact, student loans currently account for over $1.56 Trillion of total consumer debt in the U.S—second only to home mortgages.
The other new reality is keeping track of regulations offering relief.
CARES Act and Student Debt
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress in March 2020.
The regulation includes automatic suspension of principal and interest payments on federally held student loans through Sept. 30, 2020. https://studentaid.gov/announcements-events/coronavirus
Note that the student loan relief provisions are limited to government-held student loans only, leaving out commercially held federal loans, Perkins loans, and private loans
The regulation suspends federal student loan payments, reduces interest rates on federal student loans to 0%, and pauses federal student loan debt collection on defaulted student loans.
For those with government-held loans, the relief options offered through the end of September 2020 give you a “breather” that many find useful.
But what’ happens after the relief programs end?
Understand the Full Picture
Once temporary relief programs end, managing student loan debt is doable with the right information. When you understand repayment options — standard plans, extended plans, income-based plans and other payment options – you feel more in control.
To manage confusion that comes with changing regulations, student loan counseling from impartial and expert guidance has never been more important.
To take advantage of the best student loan payment plan for your specific situation, it’s helpful to get guidance from counselors who can review the makeup of your specific student loans and help you understand repayment plans.
As a recent article in HerMoney notes, there are specific steps to take for people struggling to pay student loans.
Student loan counselors can suggest ways to manage an individual situation if you are feeling overwhelmed when relief programs end.
Start a Conversation about Managing Student Loan Debt
You’ve completed an important milestone — congratulations are in order!
As you take your next steps, remember there are resources available when managing student loan debt.
A good place to start is with a free consultation from someone who has your interests at heart
Our NFCC-certified counselors help you begin a conversation about where you are today, and what you need to accomplish your goals.
We guide you to assess your financial situation related to student loans as well as your full financial picture and help create an action plan to move forward.