According to student debt expert Publisher and VP of Research at Savingforcollege.com Mark Kantrowitz, says that only 10.9% of those with federal student loans are repaying them during the pandemic or about 4.6 million out of the more than 42.3 million borrowers with Direct Loans and Federal Family Education Loan (FFELP) Loans.
As you know the pandemic has changed the trajectory of every aspect in American life. Schools, businesses, and places of worship have been shut down. Or almost every interaction has become virtual. Millions of Americans owe student loans and had those payments will be due again starting December 31, 2020. President Trump signed an executive order that extended the CARES ACT.
House Democrats have been pushing for a further extension and expansion of the pause in student loan payments, interest, and collections. The House passed the $3.4 trillion HEROES Act in May, which would have extended the CARES Act’s student loan relief by a full year to September 30, 2021, and expanded that relief to include commercially-issued FFEL program federal student loans and Perkins loans, which had been excluded from the CARES Act. The bill also included $10,000 in federal and private student loan forgiveness for borrowers experiencing economic distress.
Although Senate Republicans have reportedly rejected the HEROES Act, and there are few (if any) signs that a new agreement will be reached between Congress and the White House by the expiration of relief on December 31. With that being said student loan borrowers will start getting billed in January for their student loans for the firs time in nearly a year, and borrowers in default will again be subject to collections efforts as well as wage garnishments, tax refund seizures, and Social Security benefits.
There some options available for student loan borrowers. These are the following deferment and forbearance, switch to income driven repayment plans, and consolidation.
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