Federal moratorium on student loan payments expires – what next?
HELENA – If you have federal student loans, the government has frozen all payments owed on those loans through the CARES Act.
The federal student loan exemption expires January 31.
Valerie Curtin is the Executive Director of Compliance and Financial Aid at Helena College. She said, “It is going to be difficult, not only on the borrowers’ side, but also on the education ministry side, because what they do once this moratorium is lifted, tens of millions of borrowers are going to start again. paying off at the same time will be a very difficult task.
Curtin said now is the time to contact your loan provider and work out a plan to move forward, don’t wait until the last minute as there are options you may not have. still explored.
She added, “They are not stuck in any particular plan, they can actually change those plans when deemed necessary in their life. They could look into whether there is any potential postponement and forbearance that goes beyond the moratorium on loans, certainly repayment plans. They might consider a potential consolidation if they hadn’t already done so.
Some borrowers may be considering increasing their monthly loan payments in an effort to reduce the loan faster, but Valerie says that’s not always the best idea.
Curtin said: “I think money is very important right now, so the more money you can keep in your pocket the better, as long as you make your payments and meet the deadlines with your payments. , it’s okay to stay at a lower payout rate.
More importantly, whatever payout rate you choose, Valerie says to keep paying, because if you don’t, it could hurt you financially in other areas of your life.
Curtin said: “Student loan default affects your entire credit rating, which can affect your credit cards, it could affect your ability to get a car loan, even future student loans, anything that can affect . “
The federal moratorium on student loans expires on January 31. If you want to change or update your current loan plan, contact your loan provider as soon as possible.