College students use federal loans each year to help cover the costs of their schooling.
Eventually, they’ll have to pay them back. This year, however, borrowers were granted a break due to the COVID-19 pandemic. That relief will soon end.
The COVID-19 pandemic caused financial hardship all across the United States. When the CARES Act was signed into law, it provided financial relief.
One of the areas of relief was student loan payments. The relief lifted the interest from federal loans and allowed borrowers to skip payments with no penalty. Some graduates used this time to get their finances in order before the expected expiration on December 31st.
“I was able to pay directly onto the principal. I didn’t have to pay any interest or anything, so it helped get the main loans down.” said Jeremy Stonesifer, a 2017 graduate of Penn State.
“In the middle of December, I’ll probably be making a pretty hefty payment and withdrawing from the stock market that I already invested and using that money to start paying off the student loans.” said Trey Williams, a 2019 graduate at Penn State.
But what about those who didn’t have the funds to make payments or save during this time?
Financial advisers recommend monitoring a budget to track spending habits before beginning to make those payments again.
“If you haven’t been setting the money aside, then just make sure it’s in your budget starting for December 1st.” said Roland Kljunich.
If you don’t know where to begin, there’s technology available to help you.
“There’s a ton of different apps out there that they can use that are free. It will basically download your transactions. You can set what your budget is and it’ll tell you where you stand.” said Brittany Taylor.
UPDATE: December 4, 2020 – Secretary of Education Betsy DeVos extends student loan relief through January 31, 2021.