If you’re like me, I was enjoying the time off from paying my federal student loans.
As part of the CARES Act signed in March 2020, the government basically suspended any payments for federal student loans through September 30, 2020. This means that borrowers did not have to make any payments and interest rates were set to 0%.
Also, loan providers or credit collection agencies were not supposed to go after borrowers who were already in a default status.
As of the first week in August 2020, Congress has not passed any laws to extend that deadline past September 30, 2020. Last week, I received my first email from my student loan provider kindly reminding me that the CARES Act was only a temporary measure. I would be receiving 6 more emails regarding when my next loan amount was due, the loan amount, the interest rates, and how to make the payment.
This was the kick in the gut that I had been dreading.
So, it is better to start making arrangements now and understand your options if you cannot pay it.
If you are unable to make payments in October, then contact your student loan provider about income-based repayment plans, forbearance, or deferment options. Do not wait until the last week to start filling out paperwork because you may be in the same boat as a million other people and it will be difficult to reach someone to help you before your first payment is due.
You DON’T want to ignore it. You do not want to get a hit on your credit or FICO score. That will only cost you more money in the future. Students loans are RARELY written off in bankruptcy so plan on paying those things off or at least until you die.
Once again, my student loan provider will send me 6 more emails within the next 60 days to make sure that I am aware that I need to start repaying my federal loans, my payment due date, interest rate, payment amount, and how to make payments.
If you are also concerned about paying your student loans in October, reach out to your members of Congress and tell them that you need student loan relief extended.