College students get Federal student loan relief until May 2022. The current administration extended a student loan moratorium that has allowed families to put off debt payments during the pandemic. Payments on Federal student loans will be paused through May 1, 2022.
Some of the benefits for students and parents are, no mandatory federal student loan payments, no new student loan interest accrual, and no collection of student loans in default. In addition, wage garnishment and the reduction of tax refunds have been prohibited, providing help for student loan borrowers struggling during the COVID-19 pandemic.
Even though students have more time to pay off their loans, they should not sit back and relax. Borrowers might want to continue making payments on federal loans if they want to pay down their debt faster.
If you do continue making payments, you won’t pay any new interest on your loans during the forbearance. The 0% interest rate will save you money overall, even though your payment won’t be lower.
The full amount of your payment will be applied to the principal balance of your loan once all interest accrued prior to March 13 is paid. The student loans relief until May 2022 could be extended, but don’t count on it. Now is a great time to make extra payments if you are able.
If you are looking to lower your out-of-pocket cost for college and want options other than student loans. Contact us now for a FREE consultation. We are full-service financial aid consultants and can act as your fafsa preparer.
