This week, the Senate passed an economic stimulus relief plan that totals over $2 trillion. Included in the package are stimulus payments, extended unemployment coverage, and temporary suspension of student loans and interest payments — to name a few things.
Here’s what you need to know about your student loans and how the stimulus package will help you over the next few months.
Temporary waiver of student loan payments
If you are currently making payments on a federal student loan, your payments will be waived until May 1, 2022.
This extension should be reflected in your online account with a zeroed-out payment. If you still see that a payment is due, please contact your loan servicer directly.
Only certain federal student loans are eligible
If you’ve taken out a direct loan with the federal government over the last ten years, it is likely that your loan will be eligible for this payment waiver.
Federal loans like the Federal Family Educational Loan, Perkins Loans, and Private Loans, will unfortunately not be eligible for these waivers.
Once the bill is officially passed into law, you should get a notice from your loan servicer letting you know of the waiver. You should also receive a notice after August 1st to alert you that payments will resume.
Interest is also waived at this time
Your loan will stop accruing interest until May 1st, 2022. So, you will not be charged any interest during the waiver period.
If you choose to continue making payments during this time, you’ll be paying down the principal amount on the loan. So, if you do have the means to keep paying, now is a great time to make an extra dent in your overall loan amount.
You’ll still be on track for loan forgiveness
Despite not having to make payments over the next few months, this time will count towards on-time payments made. Therefore, if you’re hoping to have your loans forgiven after 120 on-time payments, this will not affect that progress for you.
Student loan wage garnishments are included
If you are currently getting your wages garnished by the federal government due to failure to pay your student loans, these will also be suspended at this time. This includes the seizure of tax refunds and any other federal benefit payments.
Your employer’s contributions change
If you currently work for an employer that helps make payments towards your student loans, they are also getting a break. They can offer up to $5250 towards your loan without it being included as part of your income.
As with everything related to coronavirus relief, the stimulus package could change before it is officially passed. To stay up to date, please visit a trusted news source. We will try to update our articles as we receive more information.