SAVANNAH, Ga. (WSAV)—Millions of student loan borrowers have just one month left to figure out how they’re going to resume monthly payments on their student loans while the coronavirus pandemic continues to impact the economy.
Under the CARES Act, federally-held student loans have been in forbearance with zero percent interest since March.
The relief gave more than 42 million student loan borrowers a break, including more than 37 million that haven’t made a payment in months.
With no extension finalized at this point, experts say it’s important to start preparing now.
“Because the student loan program is ending in about a month, it’s still a good time now to start thinking about the fact that that program is ending and prepare for it,” Leslie Tayne, financial attorney and founder of debt resolution law firm Tayne Law Group said. “Know what your payment is going to be and know what your ability to afford that payment is.”
Tayne says for those who haven’t been financially impacted by the pandemic, it may be a good time to increase monthly amounts to pay off loans faster.
“If you have that type of student loan, you have two great options. One is that you don’t have to pay. If you can’t afford them it’s not accruing interest which is great. But if you are working, it’s a great time to pay because you will reduce the balance that you owe without adding interest to it,” Tayne said.
“So even if you have an extra 25 dollars a month, it’s my recommendation to try to make those payments,” She added.
With payments set to resume on January 31, Tayne suggests checking in with your loan servicer to understand exactly what date your first payment will be due and mark it on your calendar.
“Especially in the private student loan arena, you need to have a conversation and ask what programs are available under the circumstances,” Tayne said.
She says if you can’t afford your payment, consider revisiting your repayment method and pursuing an income-driven plan if you don’t already have one.
“Yes, there is always a possibility that it could get extended. My advice is don’t rely on Congress potentially acting in the future to impact your student loans,” Tayne suggests. “Be prepared now, be prepared ahead of time. If Congress acts and it benefits you, then great, you can make an adjustment and pivot at that time.”
We’re on your side with student loan resources to help you prepare and pay for college or career school.
Visit the office of Federal Student Aid website for a loan simulator to help you plan ahead. Use it to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
Learn about different types of Federal Student Aid HERE.
The cost of tuition and fees at public four-year institutions increased by 17% over the past five years alone, according to data from The College Board.
Keep tabs on your monthly payments using this student loan calculator.