HELENA — If you have federal student loans, the government has frozen any payments due on those loans through the CARES Act.
Federal student loan forgiveness is expiring on January 31.
Valerie Curtin is the executive director of Compliance and Financial Aid at Helena College. She said, “It’s going to be difficult, not only on the borrowers side, but also on the Department of Education side, because basically what they’re doing once this moratorium comes off tens of millions of borrowers are going to be reentering repayment at the same time that’s going to be a real difficult task.
Curtin said now is the time to contact your loan provider and develop a plan to move forward do not wait until the last minute because there are options you may not have yet explored.
She added, “They’re not stuck in one particular plan they can actually change those plans when it is deemed necessary within their lives. They could look at if there is potential deferment and forbearance that go beyond the loan moratorium, definitely repayment plans. They could look at potentially consolidating if they hadn’t already done so.”
For some borrowers they may be thinking of increasing their monthly loan payments in an attempt to cut the loan down faster, but Valerie says, that is not always the best idea.
Curtin said, “I think cash is very important right now, so the more cash you can keep in your pocket the better, as long as you are making your payments and you are staying on time with your payments it is okay to stay at a lower payment rate.”
Most importantly, no matter what payment rate you choose, Valerie says keep the payments coming, because if you do not it could hurt you financially in other areas of your life.
Curtin said, “Defaulting on student loans affects all of your credit rating so it can affect your credit cards, it could affect your ability to get an auto loan even future student loans, anything to that affect.”
The Federal student loan moratorium expires January 31. If you want to change or update your current loan plan, contact your loan provider as soon as possible.