Student loans and payments during the Covid-19 pandemic have taken some interesting turns from the beginning of the pandemic to currently. Currently, payments are suspended, without interest, on all federal student loans through September 2021. This is good news for student debtors who have been affected by the pandemic. This is also good news for student debtors who have not been affected by the pandemic, as they may make extra payments interest free.
The pause has been automatically put in place by the federal student loan servicer. Make no mistake, however, this is a pause on payments, not forgiveness. The student loan debt will be waiting when the pause is lifted.
Whether you are seeking Public Service Loan Forgiveness or the 20 years of qualified payment forgiveness, the payments you would have made during the pause period are counted toward the forgiveness period. While this is good news, forgiveness by the Department of Education has been withheld for the first round of Public Service Loan Student borrowers. Thus, it is difficult to predict whether these programs will remain in the future or be modified by the next administration.
If you are able to pay down your student loan debt during this time, you should do so. If you are not, you should have a game plan post pause to resume your payments or contact your service provider to reduce your payments. Please be advised that this blog post does not apply to private student loans.
