Newsbrief: How student loan relief works
by Shane Duquette
(Photo: Damir Khabirov/iStock)
If you are one of the millions of people in the US who have a student loan, be patient because help is coming, according to thewirecutter.com.
President Donald Trump signed a $2 trillion stimulus package that will provide relief to student loan borrowers until September 30, 2020.
Ben Miller, the vice president for Postsecondary Education at the Center for American Progress in Washington DC, said the Department of Education will issue more guidance about the CARES Act and what it means. “Congress wrote the bill quickly. There’s only so much detail,” he said.
Payments on most student loans will be suspended until September 30th. Those who take advantage of this will not have their credit punished if they do not make a payment. If you are 270 days behind on your payments, the government can not garnish wages, tax refunds, social security checks, or any other benefits to collect what you owe. If your wages were garnished on or after March 13th, you will get a refund.
Under the CARES Act, payments on qualifying student loans are suspended and will count towards loan forgiveness. This applies for the months that are suspended.
Payments can still be made if wanted. This is optional for those people who can afford to make payments and want to pay off their loans early.
The CARES Act also allows employers to pay up to $5,250 in 2020 towards an employees student loan tax-free. This is to help students who are now out of work get some relief on their student loans.
Miller said, “This is essentially a penalty-free pause, you don’t necessarily need to sweat how to perfectly optimize additional benefits beyond that.”
Anyone with a student loan is advised to contact their lending institution before stopping payments.
Shane Duquette is reporting from home and has been practicing bass guitar and helping around his neighborhood while waiting to return to work in the next few weeks at a restaurant doing take-out.
