How to Manage Student Loans During the Coronavirus Pandemic: Life Kit: NPR

What does the CARES law mean for your student loan payments?

Student loans can be a burden, and the current coronavirus pandemic is not helping matters. With record unemployment, Americans are struggling to pay for necessities like rent or groceries.

Get into the CARES law. It’s the Coronavirus Aid, Relief, and Economic Security Act, which was passed by Congress and provided $ 2 trillion in relief. Part of the CARES Act includes automatic suspension of principal and interest payments on student loans held by the federal government until September 30, 2020.

Of course, there is the fine print. Student loans come in different shapes and sizes. How do you know for sure that you qualify for this type of relief? What about private loans? Life Kit and WNYC Studios’ Death, sex and money have teamed up to provide you with answers. Anna Sale, host of Death, sex and money, spoke with Betsy Mayotte, who heads the Institute of Student Loan Counselors, for answers to common questions about student loan relief during the pandemic.

Q: How do I know if I am entitled to relief under the CARES Act?

A: Check the type of loans you have. Individuals with federal loans held by the federal government are eligible for relief under the CARES Act.

First of all, the good news. Most Federal Student Loans Borrowers has nothing to do to qualify for relief from the CARES Act.

Mayotte says that eligible borrowers will receive a waiver of their payments until September 30, 2020 and 0% interest and that “they don’t have to do anything to get these benefits.”

But how do you know if you are eligible? This is where it gets complicated, says Mayotte. You must confirm that you have federal loans held by the federal government. Federal loans that do not qualify for relief under the CARES Act fall under the Federal Family Education Loan Program. Although these loans are part of a federal program, some of them are held by commercial banks and not by the federal government. These include PLUS loans and Stafford loans. Perkins loans held by an institution or school are also not eligible. Confusing.

The best way to confirm? Mayotte says: “Ask your agent if you have a federal loan held by the federal government, or … log on to and look at the loan details and see if it lists the Department of Education as the lender. ”

Q: Does the CARES Act really allow me to skip my payments if I am enrolled in the public service loan forgiveness program?

A: If you are enrolled in the Public Service Loan forgiveness program and continue to work full time for a qualified employer, take advantage of the CARES Act and do not make any payments, at least until September 30.

“I have so many borrowers who are so anxious about this that they say, ‘Well, I’m going to pay anyway,’” says Mayotte. “Don’t pay.”

If you want to verify that you are eligible for this exemption from the PSLF under the CARES law, visit and click where it says “Coronavirus and forbearance information for students, borrowers and parents. “

Mayotte offers you to put the money that would have been used for your loan in the constitution of an emergency fund.

Q: What if I have private loans that do not qualify for the CARES Act relief? What can I do?

A: If you have private student loans or do not qualify for relief from the CARES Act, contact your service agent.

“Private loans, unfortunately, there is no sort of general indication other than to call your loan holder if you are in financial difficulty and see what they offer,” Mayotte explains.

Many private lenders offer automatic relief, while others offer their typical forbearance option, which allows borrowers to defer payments, but interest usually continues to accrue. This means that forbearance can end up costing the borrower more in the long run.

One option to consider instead of forborne is an income-based repayment plan. This will help lower your monthly payment, sometimes up to $ 0.

There are other options, says Mayotte. “There is a postponement of unemployment. There is a postponement of economic difficulties.”

Q: I am about to default on my payments. What is a good strategy?

A: If your federal loans are in arrears, consider participating in a loan rehabilitation program.

Loan rehabilitation helps borrowers who default on their student loans get back on track. To qualify, you typically need to make nine consecutive payments on time. But under the CARES law, Mayotte notes, borrowers do not need to make these payments, and those missed payments will always be considered on-time payments.

“I’ve never seen them do something like this before,” Mayotte says. “It is a gift for borrowers in this situation.”

If you are not already part of the loan rehabilitation, Mayotte says to call your lender to sign up.

Bonus tip: Beware of crooks.

Scammers always come out of the gutters in times of crisis. Mayotte says to look for a few key pointers from any phone call or email you receive about loans.

“Anyone who tries to create a sense of urgency, like, ‘You have to do X, or you won’t get the waiver,’ or ‘You have to pay these fees’… it’s almost certainly a scam,” she says.

“Anyone who meets any of these, please, please take a minute and report them to the Federal Trade Commission, as well as your local attorney general’s office.”


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