When Do Student Loans Payments Resume
The flu, or pandemic, has been devastating for many people. And it’s not over yet. The Centers for Disease Control and Prevention (CDC) has predicted that the flu will be around through March. That means that as we enter February, some people are still feeling ill while others are starting to recover. Even if you’re feeling better now than you did last week, it’s important to remember that your student loan payments may resume later this month or next month—and there is nothing wrong with taking advantage of the pandemic to put off making those payments (at least temporarily).
Navient and other loan servicers have stopped collecting payments on student loans
If you’re nearing the end of a forbearance period, a good rule of thumb is to check with your loan servicer at least 30 days before the due date. Navient and other loan servicers have stopped collecting payments on student loans for now.
What does this mean for you? Your loans are not in default, delinquent or considered late. If you elect to make payments during forbearance, it will delay any default status from occurring until later when you resume making payments on your student loan(s).
Your federal student loans will not be reported to credit bureaus during forbearance.
Some borrowers aren’t making their monthly payments
Borrowers are struggling to make payments on their student loan debt. A new report from the Consumer Financial Protection Bureau (CFPB) shows that more than one million student borrowers aren’t making their monthly payments. Some borrowers are struggling to pay off their debt and have declared bankruptcy, while others have been unable to find a job and can no longer afford their monthly payments.
Some borrowers are making extra payments towards student loans in an effort to reduce the amount of time it will take them to pay off their loans—but these borrowers may be better served by consolidating their loans into one program with a lower interest rate than what they currently have. In addition, some borrowers are paying down balances on credit cards and car loans as well as mortgage balances so that they can devote more money towards paying off student loan debt faster than originally planned or hoped for.
Others are making extra payments when they can
If you can afford to make extra payments, do it. However, don’t put yourself in a bind by doing so. If you have other bills to pay and can only afford to pay the minimum monthly payment on your student loans, don’t change that unless you want to get behind on one of those other bills. Paying off your debt early is good for your credit score but won’t really help if it means less money for food or rent. You also run the risk of having too much debt because there are no penalties for paying back more than required at any time (within reason).
Making payments on your student loans is important to avoid late fees and negative marks added to your credit report
Making payments on your student loans is important to avoid late fees and negative marks added to your credit report. Late payments can lead to a collection agency contacting you, which can be a hassle and damage your credit score. If you are unable to make a payment on time, contact the lender immediately so they can offer assistance or schedule a payment plan (if applicable). It’s also important that you check your credit report regularly for errors – this includes verifying that the information being reported by lenders is accurate. You can get an annual copy of each of the three major credit reports at www.annualcreditreport.com; it’s free once per year, though other sites may charge for additional copies of these reports (such as every two years).
You should work to improve your credit score by paying off existing balances in full each month and taking advantage of rewards programs offered by many financial institutions (such as introductory APR periods or cash back incentives).
It’s a smart idea to make a budget during the pandemic so you have an idea of what you’ll need to pay after the forbearance ends
As we’ve mentioned before, it’s a smart idea to make a budget during the pandemic so you have an idea of what you’ll need to pay after the forbearance ends. To make this easy, we created a tool that will help you calculate your monthly expenses and set aside money for emergencies.
To use it, simply input your expected monthly income as well as any other expenses (like rent or utilities) that may come up in addition to food. You can also choose to add funds for entertainment in case things get really dire! Finally, add an emergency fund so that if something unexpected happens—if someone falls ill at work and they need time off, say—you won’t be left scrambling around trying to figure out where your next meal is coming from. We recommend setting aside 10% of each paycheck for this fund; just make sure not too much goes toward paying off student loans!
Once all of this is done and dusted, congratulations: You’re now ready for whatever life throws at us during our pandemic days!
As it stands now, the forbearance ends Sept. 30.
As it stands now, the forbearance ends Sept. 30. This is not a permanent solution; it’s a temporary one that allows you to get back on your feet before returning to payments. You should make the most of this time by addressing any issues that led to your delinquency and building up a solid financial foundation for future loan repayments.
You might have to make a budget or start saving money for the next cycle of loans, but it’s worth it. Not only can you avoid late fees and negative marks on your credit report, but also the forbearance may be extended if there is another national emergency declaration.