Do I Have to Pay My Student Loans During COVID-19 Disaster?

Many are now eligible to pause payment on their federal student loans.

The Department of Education announced that you may be able to pause your payments for 60 days or more. To take advantage of the payment waiver, you must take steps – the relief is not automatic to everyone.

Here’s how:

Call your loan servicing company to check your loan’s eligibility and to request relief. Call whether the loans are federally guaranteed or private.

• For those people already over 31 days past due, the servicer will automatically suspend loan payments. You will not accrue interest or any damage to your credit score during this time.

• Even though this federal relief waiver does not apply to private student loans, some private lenders may still offer a 3-month payment freeze. The same protections should apply – that there is no accruing interest or credit score damage. Both Sallie Mae and Navient have announced some form of private school loan payment waiver. Keep in mind: This relief is discretionary to those companies; they will determine your eligibility.

• Similar to IRS payment plans, don’t forget about the standard income-based payment plans for student loans. If you are now a low-income (or no-income) borrower, ask whether you qualify to make no monthly payments for as long as their income stays low. Even if your income level has dropped lately, you should also inquire about this option. This plan could bring a better result than a temporary waiver based upon COVID relief.

• Many borrowers have payments automatically drafted from their banks. Don’t forget to edit, pause, or reset those automatic payments you have set up. Otherwise, those payments will still happen, whether or not you received the waiver.