COVID-19 has changed a lot of things in everyday life for most people. Many of us have transitioned into working from home, or not working at all. Others have had their entire lives uprooted. In many cases, it has also impacted people’s ability to pay their bills. Because of this, the United States government is offering student loan payment relief options through December 31, 2020, which is beyond the initial September extension.
Changes to Student Loan Payment Relief
In the wake of the coronavirus in the U.S., the government announced there would be no interest on student loans through September. This also meant no payments were required of borrowers during this time. Early in August President Donald Trump announced this extension would continue through December 31, 2020.
On top of suspending payments during this time, loan providers will also stop collections on defaulted loans. Loans will also be interest-free through the end of the year.
Should You Keep Paying on Your Loans?
Because loans are interest-free at this time, it is a great time to continue paying (and even pay more) on your student loans. For people who are able to keep up payments, this is the perfect time to really attack those loans. You could potentially make some serious debt freedom progress.
However, not everyone is able to continue payments at this time (I haven’t been able to). The student loan payment relief couldn’t have come at a better time for us. We are looking at moving again because of the cost-of-living here as well as a number of personal reasons. Recently, we were hit with about $1,500 in unexpected expenses, bottoming out our emergency fund.
So, when it comes down to it, don’t beat yourself up about not making these extra payments right now or being able to keep up with everything. Most of us can’t right now. By all means, if you have the ability, pay as much debt off as you possibly can, but if you’re working on just keeping your head above water right now, that is okay too.
Readers, how has the student loan payment relief impacted your finances? Are you still making payments or have you taken a break?
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Amanda Blankenship is the Director of Social Media for District Media. In addition to her duties handling everything social media, she frequently writes for a handful of blogs and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.