OMAHA, Neb. — The CARES Act temporarily put federal student loan payments and interest on hold until late September, giving relief to millions of Americans during the pandemic. But the same doesn't necessarily apply for private loans. Looking into each loan and finding out what they offer in regards to the virus is highly recommended by experts.
When the CARES Act was enacted in March, federal loans were paused automatically.
"Which means that they don't have to make a payment on them and during that time the interest rate is at zero percent," director of college planning at EducationQuest Omaha Joan Jurek said.
But the relief is only automatic for federal loans.
"If they have a private loan, that's a whole different story," Jurek said.
Some private lenders are pausing payments, some aren't. But most are offering some type of relief as Sallie Mae spokesperson, Ashley Boucher, explains.
"Sallie Mae customers are encouraged to call us and let us know if they're experiencing any hardship and there are assistance options available. Maybe suspending payments or things like that," she said.
If you're not sure which loans are qualified for relief and need guidance - organize every loan and start making calls to your lender.
"If they have an economic hardship, if they have a loss of employment, always contact and reach out to that servicing organization because there's something there that can help them through that period," Jurek said.
If you can still pay some of your federal loans during this forbearance period - it's beneficial that you do.
"Anytime you can pay a little bit extra towards that loan, it's going to knock it down of course," Jurek added.
The pandemic has also affected recent high school graduates entering university in the fall. According to the National College Attainment Network, FAFSA filings are way down.
"The FAFSAis the gateway to $150 billion dollars in federal aid and that's grants, scholarships, work-study and federal student loans," Boucher said. "Not filing the FAFSA in particular is a problem because you're leaving potentially thousands of dollars on the table."
Resources:
StudentAidPandemic.org - free guide for individuals navigating student loans during pandemic
EducationQuest.org - free college planning services
ProtectBorrowers.org - free webinar on managing student debt during pandemic
SallieMae.com - COVID-19 loan information
Nelnet.com - COVID-19 loan information