From October 1, 2021, your student loan payments will be due again.
You need to know – and what it means for your student loan.
If President Joe Biden does not extend the student loan relief – which includes a temporary deferral of student loans for federal student loans – your student loan payments will be due again starting October 1, 2021. In that case, you may have to answer a million questions to head over to the end of the payment hiatus for your student loans. Here are the answers to 10 common questions:
1. Are my payments for the federal student loan due on October 1, 2021?
If Biden doesn’t extend student loan relief, September 30th would be the last day. This means that student loan payments will resume from October 1, 2021, but that is not necessarily when the student loan payments are due. Your specific due date for your student loans lies between you and your student loan service provider.
2. What is the interest rate on my student loan when the student loan payments are resumed?
When student loan payments resume, your interest rate should be the same rate you had in March 2020 when the student loan suspension due to the Covid-19 pandemic began. There will be no new interest on your federal student loans during the Covid-19 pandemic. The effective interest rates on your federal student loan were 0% for that period. If you think there is a problem with your interest rate, check with your student loan service provider.
3. I have an adjustable rate student loan. Won’t my interest rate change from October 1st?
All federal student loans are fixed-rate student loans. If you have a variable student loan, it is a private student loan. Due to the Covid-19 pandemic, private student loans are not covered by the temporary deferral of student loans. However, the variable interest rate on your personal student loan is subject to change.
4. Will I still have the same student loan service provider?
Most student loan borrowers will have the same student loan service provider they had before the Covid-19 pandemic. If your student loan was sold or transferred, you would have received correspondence from your previous student loan officer.
5. How do I contact my student loan service provider?
Contact your student loan service at any time. You don’t have to wait for the student loan payments to resume.
6. How will I know if student loan payments will resume after September 30, 2021?
If the payment hiatus expires on September 30, 2021 as planned, the U.S. Department of Education will contact you in writing to advise you that regular federal student loan payments will resume.
7. Should I change my earnings-based repayment plan?
If you’ve signed up for an earnings-based student loan repayment plan, now is a good time to review your current student loan repayment schedule. There are four income-based repayment plans: IBR, PAYE, REPAYE, and ICR. Now is also a good time to update your income and family information. Your income, marital status or family size may have changed as a result of the Covid-19 pandemic. Make sure you update this information as it could affect your student loan payments. This is also a good time to update your auto payment contact and banking information in case there are any changes. For more information, please contact your student loan service.
8. I have not made any payments for the federal student loan since March 2020. Can I get a loan for student loans?
Yes, one of the great benefits for student loan borrowers is that even if you haven’t made any, you will get “credit” for federal student loan payments during the Covid-19 pandemic. This is helpful for anyone looking for an income-based repayment plan or student loan termination through the Public Service Loan Program after 20 or 25 years. In practice, from March 2020 to September 2021, you would receive a “credit” for paying a student loan every month, even if no student loan payment was made. This is especially helpful for student loan borrowers seeking government loan relief that requires 120 monthly federal student loan payments.
9. Will Biden extend the student loan payment hiatus beyond September 30th?
It is possible that Biden will extend the student loan facilitation beyond September 30, 2021, even if the unemployment benefits and eviction moratorium end. The expanded unemployment benefits and eviction moratorium are two other popular financial aid programs for those who have run into financial difficulties during the Covid-19 pandemic. The federal government has decided not to extend any of the programs. However, there is no guarantee that Student Loan Facilitation will be extended. For example, Biden may extend student loan relief beyond September 30th, but there is one major dilemma. Senator Elizabeth Warren and other members of Congress and US Department of Education officials have urged the president to extend the student loan facility until at least early 2022. However, Biden or Education Minister Miguel Cardona did not say whether there will be any enlargement.
10. Will my student loans be canceled?
Some student loan borrowers believe student loan cancellation is possible while others say student loan cancellation has been canceled. Biden has canceled nearly $ 3 billion in student loans since taking office as president. This includes canceling student loans for $ 1 billion in student loans for 72,000 borrowers. Biden canceled an additional $ 1.3 billion in student loans for 41,000 borrowers with total and permanent disabilities. Biden has also canceled $ 500 million in student loan debt for 18,000 student loan borrowers under the borrower defense rule to repay student loans. Last week, Biden also canceled $ 55.6 million in student loans, which means that Biden canceled $ 1.5 billion in student loans this way. The termination of the student loan and the term of the student loan are separate topics. The administration of Biden is considering canceling the student loan, but any decision on the extensive forgiveness of student loans will not affect whether the temporary student loan relief (which involves paying student loans) is extended. It is possible that both or neither will happen.
There is no guarantee that the student loan facility will be extended. In any case, make sure that you are financially and strategically prepared to repay the student loan. Here are some popular options for saving money: