You are not alone. More than 42 million Americans have student loan debt. Educational loans have become the largest source of unsecured debt in the United States. Americans owe more than $1.5 trillion in student loan debt, outpacing credit card debt in the past few years. The pandemic and resulting job loss or furloughs have made paying back student loans even more difficult for many people.
Defaulting on Student Loans Can Have Serious Consequences
Student loan debt is a drag on the economy, and certainly on the personal economy of families struggling to pay for higher education, among other expenses. People who fail to pay their student loans can have their wages garnisheed, and their tax refunds or Social Security benefits withheld to repay the loans. Generally, student loans aren’t dischargeable in bankruptcy, but the automatic stay afforded to debtors in bankruptcy stops collection and most often gives people breathing room to try to manage their student loan debt.
Temporary Relief: The CARES Act Suspension Extended to January 31, 2022
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in March 2020 provided temporary relief by suspending most federal student loan payments, waiving interest, and halting collections on defaulted loans through September 2020. Although there have been several extensions since then, payments were scheduled to resume on September 30, 2021. However, the Biden administration extended the suspension until January 31, 2022. Payments, interest, and debt collection will now resume on February 1, 2022.
Yes, You Still Have to Pay Your Student Loans
The suspension of payments, interest, and collection of student debt is not a forgiveness or cancellation of the debt. You will have to begin paying the loans again once the temporary suspension ends on February 1, 2022. If you are currently in a position to make payments, these payments will be applied to the principal balance, which can reduce your interest payments over time.
BransonLaw Can Help You
Branson Law can assist you with your repayment options under various federal programs. The loan servicers do not have a personal relationship with you, and it can be assumed, will be more likely to look out for the interests of their companies. Branson Law will work with you, be your advocate, and look for ways that you can benefit from existing federal programs to repay your loans and get your family’s finances back on solid footing. Additionally, Branson Law has been instrumental in the formation of the Student Loan Management Program in the Middle District of Florida. Utilizing the program may give you the best chance at managing your student loan debt.
Preparing for the Resumption of Payments
Even if you are not yet in a position to make payments, there are several steps you can take now to be prepared when you need to resume payments. Make sure your contact information is up to date, download and save relevant loan records, and start thinking about your repayment options. Please contact BransonLaw and let our team help you determine your options and advocate for a manageable repayment plan.