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federal student loan relief 2021


Federal Student Loan Payments Suspended Immediately due to COVID-19

COVID-19 federal student loan relief has been extended until September 30, 2021, by Joe Biden’s administration. This means borrowers will not have to make a payment on ED-owned federal student loans until that date. This is an extension of Trump’s memorandum for debt relief on federally held student loans (also known as the CARES Act). Originally, the student loan relief was supposed to end at the end of January 2021, so for many, this extension is a true Blessing. Most federal student loans are eligible for this new student loan relief option, but not all creditors will automatically implement it. 

How to implement the new federal student loan relief for 2021?

Some student loan creditors may require borrowers to contact them directly and request to suspend student loan payments, but most will automatically implement Biden’s student loan forbearance. Don’t rely on your creditors to automatically pause the payments because you may end up with delinquent student loan payments. Login to your account on your student loan servicer’s website (or call them) and check to ensure that your payments have been paused. Payments will also be paused on consolidated student loans.

For clients of Golden Financial Services, we will verify clients’ payments have been paused and that they’re taking advantage of this new federal debt relief.

Can you still make student loan payments?

You may contact your student loan creditors and let them know that you choose to continue making payments. The benefit of making monthly payments is that all of the payments will go towards paying down your student loan balances since no interest will be owed. 

Will my payments count towards loan forgiveness?

For students that have consolidated student loans and are on an income-based repayment plan that will eventually offer loan forgiveness, don’t worry because while your payments are paused they will still count towards the loan forgiveness period. 

So, for example, if you’re on the Public Service Loan Forgiveness Program (PSLF) and you only have five years remaining until you qualify for loan forgiveness, the paused payments over the next six months will still be attributed towards the five-year time-frame that you have remaining. So in this example case, there’s not much reason why you’d not want to take advantage of the interest-free forbearance right now. 

Here’s a summary of what the new federal student loan relief means for you in 2021:

• Borrowers are not required to make monthly payments on ED-owned student loans until after September 30, 2021. There will be no interest accruing while payments are suspended or being charged if you continue to make payments. 

• Payments you would have made, but are not currently required to make, will count toward income-driven repayment plan loan forgiveness and this includes Public Service Loan Forgiveness (PSLF). For anyone on the PSLF, make sure to submit your PSLF employment certification form every single year verifying that you still have a public service job. Click here for more information on how to consolidate student loans and get on the PSLF program.

Joe Biden Student Loan Forgiveness

As of 2021, the only way to get student loan forgiveness is if you are disabled, involved in federal student loan-related fraud, or on an income-driven repayment plan that offers loan forgiveness.

Do you owe above $10,000 in unsecured debt including credit cards, medical bills, and collection accounts? Call 866-376-9846 to learn about debt relief options. 

• If you can make payments on your federal student loans while your loans are at the 0% interest rate, the full amount of your payments will be applied to the principal once all the interest that accrued before the 0% interest period is paid. Therefore, it’s a smart idea to continue making payments on your federal student loans if you can afford to do so or use the extra money to pay down other debt. A popular way to pay down debt is to use the debt snowball method. Here’s a free snowball calculator to assist you with the debt snowball method.

Many students will be using the extra money to pay down other debt, including high-interest credit card debt. 


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