Prepare Now: Student Loan Relief Ends on January 31
On August 6, 2021, the U.S. Department of Education (ED) announced a final extension of the federal student loan payment pause until January 31, 2022. This means millions of federal student loan borrowers will resume making payments after January 31, 2022. Below are 5 most asked questions to help prepare for loan payments, as they begin again:
1) Why haven’t I had to make payments on my federal student loans since March 2020? On March 20, 2020, the Secretary of Education directed the office of Federal Student Aid to provide the following relief on the U.S. Department of Education (ED-held) federal student loans:
— Suspend loan payments: ED-owned student loans were placed in a temporary payment suspension. Which meant you didn’t have to make monthly payments during this time. If you made a payment during this time, you can request a refund through your loan servicer.
— Stop collections on defaulted loans: Student loan default means you did not make payments as outlined in your loan’s contract. Default timelines vary for different types of student loans. As part of the first coronavirus relief bill, the government stopped federal student loans from entering default and paused collection activities on those that already had, through Jan. 31, 2022.
— Interest rates set to 0%: Borrowers with federally-held student loans automatically had their interest rates set to 0% for a period of at least 60 days.
On March 27, 2020, Congress passed, and the president signed into law, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provided the three relief measures above through Sept. 30, 2020. Several more extensions occurred, with the final extension being made this August and ending January 31, 2022.
2) When will I have to start making payments on my federal student loans? Once the payment suspension ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due. You can contact your loan servicer online or by phone to find out what your payment amount will be when payments restart. If you’re unsure of who your federal student loan servicer is, you can look it up in “My Federal Student Aid.”
3) I received a phone call or email saying I’m eligible for COVID-19 student loan forgiveness – is this legitimate? According to ED, there is no coronavirus-related loan forgiveness available for federal student loans. If you are contacted with messages about student loan forgiveness, do not provide any personal or financial information – contact your loan servicer with questions or for help. To learn more on how to avoid student loan scams, visit: StudentAid.gov/Resources/Scams.
4) Where can I find more information about my federal student loans and what happens after January 31, 2022? Continue to monitor the U.S. Department of Education’s website dedicated to the topic, ensure your contact information is up to date within your loan servicer’s website, and in your StudentAid.gov profile.
5) What about my private student loans? All of the CARES Act provisions apply to federal student loans. If you have made arrangements or have questions about your private student loan repayment, you should contact the lender for those loans.
To learn how to prepare for loan payments as they begin again, visit StudentAid.gov. And, if you want a lower student loan interest rate, lower monthly payment, or both, then an NIHFCU refinanced student loan could be your great move.
STUDENT LOAN REFINANCE SPECIAL FROM NIHFCU
Refinance and enjoy no payments and no interest for 3 months1 AND get $25002.
Click here for more details: nihfcu.studentchoice.org/refi
With emergency relief for federal student loans ending on January 31, now is a good time to apply or give us a call at 844-823-8544.
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