In response to the pandemic, Uncle Sam did you a favor and paused most student loan payments – without you even having to ask.
The Dept of Education placed eligible federal student loan borrowers in “administrative forbearance” from March 13 to September 30. You can still make payments, but there’s no penalty if you don’t.
If you do, 100% of your money will go toward the loan principal. Paying that down means you’ll have less to pay interest on later – so you could be out of debt sooner. On the other hand, if your emergency savings account could use some TLC, you could save some of the money you’d usually spend on student loans. You can also use it to pay down other, high interest debt if you’ve got any. Decide what’s best for you.
The Department of Education can’t legally tell private institutions to stop collecting your payments. But as their customer, you can ask about it. Brush up on your negotiation skills and see if they’ll give you a break.
Related: Refinancing Student Loans
Student loans aren’t usually this flexible. But a lot of Americans are struggling financially right now, and some lenders are trying to help. Take them up on it if you need it.
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