Administrative forbearance for federal student loans not end on January 31st, 2021, payments to resume in February.
Since March 27, 2020, monthly federal student loan payment obligations were automatically suspended, as part of the $2 Trillion Stimulus Package known as The Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The suspension was set to expire at the end of September, however, President Trump signed an executive order on August 8th extending the forbearance until December 31st, 2020, and then extending the forbearance another month until January 31st, 2021.
All of the extensions have included the waiver of all interest on student loans held by the Department of Education and halted the collection of federal student loan debt. Non-payments (for those already enrolled in income-driven repayment plans) have also “counted” toward the 120 required payments for the Public Service Loan Forgiveness program, totaling 10 months.
Lock in lower payments (even down to $0) before COVID relief expires
If your income has been impacted by COVID-19, or if you’d like to lower your monthly payments to make them more manageable, we can help! Our free Explore tool helps you determine if you qualify for federal income-driven repayment (IDR) plans. In 3 easy steps, you can reduce or eliminate your payments for the next 12 months.
With millions of borrowers resuming repayment at the same time, there may be delays in processing requests. Be sure to get started today to have your IDR request processed by January 31st.
What are income-driven repayment plans?
Income-driven repayment plans can lower monthly payments potentially down to $0 because they cap required monthly payments in proportion to your discretionary income. Meaning if you are unemployed or don’t make enough income relevant to your debt, you may not have a monthly student loan bill. IDR plans are easy to enroll in and are a much better option than requested deferment, forbearance, or default!
How to enroll in an IDR plan
There are five IDR plans to choose from. Monthly payments cap at 10%, 15%, or 20% of your discretionary income depending on the plan you choose. Read more about each of the plans as well as the pros and cons on our blog, How To Qualify For Income-Based Repayment Plans. But don’t worry, we can help you determine which plan is best for you.
Once you choose a plan, enrolling is easy. Our app will walk you through the necessary questions and documents needed to submit your application. Once your application is submitted, it can take up to 30 days for approval, so now is the perfect time to enroll because once administrative forbearance ends, you’ll already be enrolled in a plan that is comfortable for you.
With all the madness going on this year, the last thing anyone should be worried about is their student loans. You also shouldn’t have to rely on massive call centers to get the expert student loan advice you need. Besides, none of the servicers are going to take the time with you to discover which income-driven repayment plan (or forgiveness program) is right for you. It shouldn’t matter where you work or what your credit score is. We believe every borrower should have access to student loan experts that have their best interests at heart! This is why we created Chipper Concierge.
We’re real people, who work alongside the Chipper app to provide guidance via chat or Zoom. We’ll work with you 1-on-1 to determine the best repayment strategy for your situation, and help you complete and submit all applications and documents for income-driven repayment and forgiveness programs right from the app.
Throughout the year, we’ll notify you when to recertify required forms, help you determine how life events may impact your repayment options, and make any changes to your plan.
Read more about Chipper Concierge here. We’re excited to help you toward your student loan goals!