COVID-19 enacted all sorts of rules and regulations to try and help the members of our community that were and still are struggling to make ends meet. The coronavirus pandemic has compounded economic stress on student loan borrowers, with 59% reporting increased stress, anxiety, and depression caused by their student loans during the COVID-19 pandemic. (reported by the studentloandebt.org) The CARES Act was created to provide relief to these student borrowers. What is the CARES ACT?
- On March 20, 2020, the office of Federal Student Aid began providing the following temporary relief on education-owned federal student loans: suspension of loan payments, stopped collections on defaulted loans, and a 0% interest rate.
- This means that no payments are required on federal student loans owned by the U.S. Department of Education between the dates of March 13, 2020 and September 30, 2021.
- One thing to note: private student loans, and federal student loans not owned by the Education Department, are not covered by the CARES Act.
- Pay more than your minimum - To do this correctly you can't just overpay the bill online, you have to call in. Speak to someone about where and how you want the overpayment amount allocated, if you don't they could just put they money toward your next month's payment.
- Enroll in Auto-Pay - Many student loan companies offer a discounted rate or a lower percentage rate just for using auto-pay. Take advantage of this savings if you can, every little bit helps!
- Make more payments each month - Sometimes it's all about tricking your mind! Seeing a huge payment leave your bank account once a month can cause uneasiness and stress! If you split your payment into two affordable payments - you won't feel the anxiety of that hefty payment, plus you'll be tackling your debt head on.
- Use "extra" cash when it comes in - If you get a raise or somehow come into some extra money, use a portion of that influx of cash to pay off your debt. Since it's money that you weren't counting on to pay your bills, you won't be hurting if it isn't there. Take 50% of the "new" money and put it towards your current student loan balance.
- Start a piggy bank or overflow account - The best way to grow your money, is to watch it grow! Start a stash or piggy bank for cash or loose pocket change sitting in your car or just empty your pockets at the end of the day. Set bench marks for yourself and when you reach these bench marks put that money towards your current student loan balance.