(TargetLiberty.org) – Last March, President Trump signed the CARES Act to help protect Americans against the coronavirus pandemic. Among many other things, the act suspended federal student loan repayments. In May 2022 (extended from January 2022), that suspension will end – so what needs to be done about repayment? Here are four essential steps to take.
Advocates worry that poor communication and inadequate staff will cause problems for student borrowers after the pandemic pause on student loan repayments.
— The Hechinger Report (@hechingerreport) December 7, 2021
Check Loan Details
Make sure banking details are accurate and up to date. If they’ve changed since the last payment was made, they’ll likely need updating. The Education Department is trying to contact borrowers ahead of time to tell them when payments are due to restart. Outdated contact information could cause issues later.
Review the Loan
Go through the details of what’s owed to whom. Most people have a mix of both federal and private student loans – but that mix could have changed during the pandemic. Some former student loan servicers have ended their federal contracts and passed their student loan business on to other providers.
Look at Refinancing
Loan payments that were feasible when the obligation first started might not be the best option now. Refinancing a loan could result in a lower interest rate, unemployment protection or more flexible repayment terms.
Finally, make sure student loan repayments are included in a budget. If it’s a payment that has not been made for a while, you may need to adjust other priorities to fit in the new monthly amount. A proper financial plan will make that a lot easier.
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