Here’s some good news in a sea of panic and scary news. The U.S. Department of Education told student loan servicer to suspend payments on student loans for two months. It’s not automatic though. Read on for how to deal make the most of it.
Before we start
Before we start, if you’re on automatic deductions for your student loan payment, check your payment date!!! As part of my unemployment survival guide, I told you to check your automatic payment dates and stop them right away if possible.
Whatever the date is, make sure you contact your student loan servicer before that date so you don’t get hit with a payment you don’t have to make during this temporary freeze. If the normal payment is the 24th, make the call now or get online. I don’t care how long you have sit on hold or how slow the website is.
When you talk to them, they’ll most likely explain what of what I’m telling you.
Remember: CASH IS KING when you’re surviving unemployment.
That said, let’s get on to some more details about what’s going on.
60 Day Stop on Student Loan Payments
Just yesterday, the United Stated Department of Education announced two key things:
- The stopped any new interest charges from being added to your loan for at least 60 days
- You have the option to not pay for at least 60 days
If you’re unemployed or getting impacted by the sudden economic downturn, the first point probably isn’t a huge deal. But it’s nice to know that, at least in the long term, you’re saving a little money. The government set your interest rate to zero temporarily, which is nice.
The second point is much more important if you’re suddenly unemployed or struggling to bring in money.
“Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing. I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.”Betsy DeVos
How to stop your student loan payments
During this unfortunate phase we’re going though, anyone who requests an “administrative forbearance” can get one for at least 60 days, which is probably two student loan payments for most of us. Forbearance means you don’t have to pay for a short period of time.
To get it, you have to take action. The payments don’t automatically stop (which is part of why I wanted to mention that you MUST check your auto payments and get in front of it). Use this link to find your student loan servicer and contact them.
To get stop your loan payments for a while, contact your loan servicer. The loan servicer is whoever you make your payment to. Mine, for example, go to Navient.
There are some details
Read these notes while you’re waiting on hold or waiting for that website to load!
If you’re seeking a Public Service Loan Forgiveness, you may want to continue making payments, if you can.
Also, if you’re on an income-based repayment plan, there might be some wrinkles. For example, your payment may have, effectively, been reduced to zero. I think you can probably keep up with that payment. Talk to your servicer to see what their point of view is.
If you’re currently 31 days delinquent on your student loan, then you automatically get the 60 day forbearance. I’m a bit unclear on how this works out… does this mean you effectively get to skip three payments? You might have to double up on a payment to catch up, eventually, but I’m honestly unclear as I write this. If you’re waiting on hold with your servicer, you might as well stay on hold and confirm whether you’re in the 31 day period and what happens after 60 days, if they know.
The suspension of interest charges started on March 13, 2020.
The Department of Education has a pretty good list of frequently asked questions you should review too. Some of their questions might help you with your specific issue.
What about private student loans?
Private student loans don’t get the same protections that federal student loans get, unfortunately. Still, everyone knows what’s going on, and they should be flexible with your loans. Reach out to them to see what your options are.
I tried to check Sallie Mae this weekend, for example, but the website was DOWN. Probably not a surprise under the times.
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