Over 14 million students were actively enrolled in college when schools began to shut down or move to remote learning due to the coronavirus pandemic. Many (most?) current students are worried about paying for their classes and whether loans will be due if classes end, or how to pay for them if there is no work. Many (most?) graduated or former students are also worried about how to pay for their loans if there is no work. The CARES Act provides some relief for those with student loans, although as with everything, there are a few catches and complications built in. Here are a few perspectives and a little guidance on the topic.
What You Need to Know About Student Loans and the Coronavirus Pandemic (Consumer Financial Protection Bureau)
"From March 13 through September 30, 2020, the interest rate is set to 0% and payments are suspended for student loans owned by the federal government. Your federal student loan servicer will suspend all interest and payments without any action from you. You do not need to contact your student loan servicer."
Key points here include tips to protect yourself from scams, what to do if you can't pay loans that aren't eligible, and steps to take regardless.
What to do if your Student Loans are Ineligible for Coronavirus Relief (Forbes)
This article gives, first, a brief reminder of eligibility requirements for relief, and then tackles options for managing current, ineligible loans like college-owned Perkins loans, or commercial loans, like:
- Contact your lender (especially if you have a private loan)
- Apply for deferment or forbearance
- Consolidate your debt
Financial Advice Webinar: Managing Student Loan Debt Payment During the COVID-19 Crisis (NYLAG)
The New York Legal Assistance Group (NYLAG) has a webinar specifically about student loans and the CARES Act. Their website helpfully timestamps different sections, so depending on what you are looking for you can go to that exact point. There is information particular to New York State but most of it is relaying information from the federal perspective. Their page also includes links to resources mentioned in the webinar (below the video).
Coronavirus Stimulus: 5 Things Student Loan Borrowers Should Know (US News & World Report)
This is a quick but clear rundown of the salient changes to federal student loans in the CARES Act. They cover these aspects: The temporary pauses are automatic; not all federal student loans qualify; the pause does not apply to private student loans; borrowers get six months toward loan forgiveness and loan rehabilitation programs; and, you may want to continue making payments, if possible.
Cares Act student-loan relief has few takers (Investment News)
One interesting feature of the CARES Act that employers may want to take note of is the opportunity to help their employees immediately by paying down their student loans, tax-free. From the article, the CARES Act: "allows companies that make payments toward their employees’ student loans to contribute as much as $5,250 through Dec. 31, with that money not counting toward workers’ taxable income." This would be a tremendous help to those with jobs who are struggling to pay loans at this time - though depending on the company's field or circumstance, this may not be something they will opt to do.