FEDERAL STUDENT LOAN: Payments Will Be Suspended, Here's What You Need To Know!
President Donald Trump signed the CARES Act that includes the suspension of Federal Student loan payment through September 30 according to a recently published article.
One source of financial aid in the United States is a Federal Student Loan. Most of the students and parents applied for a Federal Student Loan while others chose Private Student Loans. Through this, there will be more students who will have access to higher education.
However, because of the present situation amid the economic effect of COVID-19, many individuals were laid off or furloughed from their jobs and that includes self-supporting students. This means that many also cannot pay their loans and debts.
The U.S. government understands the difficulties and challenges that every individual in the United States is facing today. To address these problems, Pres. Donald Trump signed recently the CARES Act that includes the suspension of payment of Federal Student Loan and that will also help them manage their money amid the economic effect of COVID-19.
SUSPENSION OF FEDERAL STUDENT LOANS
Yes! You read in right! This means that you can choose to stop paying your federal student loans through Sep. 30, 2020. Moreover, you will not also pay any penalties or charges for late payments. However, it is important to take note that this is only applicable to federal student loans. CARES Act does not include student loans from private entities.
For this period also, there will be no interest rates that will accrue from your federal student loans. However, be reminded again that this does not apply to private loans.
It should also be clear to those who have federal student loans that CARES Act does not forget your student loan. Meantime, the federal government has suspended the collection of payment because of the global health and economic crisis that everyone is facing today.
If you choose not to stop paying your federal student loan through September 30, 2020, this will not negatively impact your payments for student loan forgiveness. This simply means that this will not hurt your chances to qualify for public service loan forgiveness.
OTHER IMPORTANT INFORMATION THAT YOU NEED TO KNOW
It is important to take note that the federal federal government is not paying for your federal student loan. Since almost everyone cannot pay their federal student loans this time, it is the reason why payments are being waived through September 30, 2020.
When it comes to the student loan forgiveness plan, there were two proposals. Senate Democrats proposed to forgive at least $10,000 of federal student loan borrowers while the House Democrats proposed $30,000 federal student loan forgiveness. However, none of these are included in the CARES Act.
There might be a big chance that when you visit the website of your student loan servicers they have not yet updated their sites to reflect this legislation since this is new. Make sure also to know how not to get disqualified for student loan forgiveness.
The inclusion of the suspension of payments of federal student loans amid the global and economic health crisis is a big help for those who have standing federal student loan balance. This will also help them to save and manage their money while the crisis is still going on.