A typical email I receive is something like, "Help! I have student loans—what advice can you give me?" I certainly understand why many graduates feel buried under the weight of debt.
The burden of student loans causes many people to feel like they can't fully live their life.
According to Educationdata.org, student loan debt in the U.S. totals $1.68 trillion. It's held by 44.7 million borrowers, who owe an average of $37,584. Borrowers with federal loans owe slightly less—$36,520—and those with private student loans owe much more—$48,819.
The burden of student loans causes many people to feel like they can't fully live their life. You might delay getting married, starting a family, buying a home, or starting a business due to the financial burden.
Today, we'll review updates to COVID relief for student loan borrowers and I'll offer tips to help you manage your federal and private student loans. Knowing your options can help you find the best repayment strategy and relieve financial stress.
Updates to COVID student loan forbearance
When the pandemic's economic fallout began, it was clear that student loan borrowers would need assistance right away. So, in March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act became law. It suspended payments, stopped collections on defaulted loans, and set the interest rate to 0% for loans owned by the U.S. Education Department through September 30, 2020.
Before the student loan forbearance period expired, it got extended through December 31, 2020. Then the measures got extended again to January 31, 2020, and finally to September 30, 2021.
Which student loans qualify for COVID relief?
The federal government must own a student loan to qualify for relief under the CARES Act. They include:
- Direct Loans that are unsubsidized or subsidized
- Direct PLUS Loans
- ...
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