As the Economy Recovers from COVID, What’s Next for Student Loans?
As the summer quickly approaches, so also does the end of the CARES Act interest and payment halt after September. Recently confirmed Education Secretary Miguel Cardona suggested that while this administration is open to extending the payment and interest halt, borrowers should begin planning to enter repayment in October if our economic recovery continues. What does this mean for you?
Student loan servicers continue to be challenged by the CARES Act changes. Borrowers have been simply told that there’s no representative available to speak with when they called. As a result of capacity and other challenges, a few considerations for you:
- Income-Driven Repayment (IDR) plan renewals remain extended with the CARES Act. Unless your income has decreased or there’s a need to update your repayment plan, we’re advising borrowers to enjoy the extension and await renewal details following the end of the CARES period.
- Employment Certification Forms (ECF) completed during the CARES Act payment halt may be rejected, as FedLoans doesn’t recognized the “forbearance” as qualified time towards PSLF. Rest assured, the language in CARES states that this time DOES count, assuming you were in a qualifying repayment plan when the halt began on March 13th, 2020. If you’re unsure of this answer and would like detailed consultation on your loan strategy, we recommend Doctors Without Quarters. Use the code “pslfjobs20” for a 20% discount.
- As a result of this common ECF error, we are advising borrowers to hold off on submitting ECF forms until at least later this year. We’ll keep you posted.
For 2021 graduates, congratulations on finishing school during this challenging last year. In most cases, we’re advising that borrowers consolidate after they graduate, but before they start training/work, as your grace period does not count towards loan forgiveness.