Student loan relief
Explore more about student loan relief, the help you can receive from ACCC, HEROES and CARES Act introduced during COVID 19, and other student loan relief options
Updated by Aparna A on 10th November 2021
If you are struggling with college loan debt, there are multiple ways to find a Student loan relief program during COVID-19 and can seek help at American Consumer Credit Counseling (ACCC), where the professionals assess your financial situation and guide you with the right options to stabilize your financial difficulties. During the COVID-19 pandemic, the representatives of the U.S. House have passed the HEROES Act and CARES Act to help students in these testing times. What are the other options to choose, which is a part of student loan relief?
Table of contents
- Help received at ACCC
- Student Loan Relief and Heroes Act introduced during the pandemic
- CARES Act signed in March
- Other student loan debt relief option
Help received at ACCC for students
American Consumer Credit Counseling has professionals who help you gain financial aid by providing free counseling sessions, assessing your monetary conditions, and help you choose the right student loan relief. ACCC is an organization providing service to its customers to regain financial stability and help them get out of student loan debt. They have free credit counseling, tips to manage money, free educational materials, and tools to manage finance. They have trained counselors to help you with useful resources to get off student loan debts. Free credit counseling sessions are given, and they will also direct you to the right federal loan relief programs.
Student Loan Relief and HEROES Act introduced during the pandemic
Under the student loan relief and Heroes Act has multiple provisions that help the student loan borrowers who are struggling with loan debt. Below are the student loan aid provided by the Heroes Act :
The Heroes Act stops collecting payments and interest for federal student loans until 2021 as the COVID-19 pandemic condition does not get any better-affecting students financially.
10,000 dollars given to financially distressed borrowers have private student loans.
10,000 dollars given to federal student loan forgiveness, who is in default, delinquent, and other deferred loans.
It is also learned that there are chances where Senate might pass another stimulus bill to help unemployed, as multiple businesses have closed down. But it is still unsure if the fourth and final stimulus bill will be passed? and by when? Sen. McConnell states to provide additional help for small businesses and for healthcare workers.
CARES Act signed in March
Student Loan Relief with CARES Act is applicable for borrowers with federal student loans like Direct and FEEL loans owned by the ED. Perkins and private student loan holders are not eligible under this act. Studies say that at least 9 million federal student loans have been benefitted with this Act. The benefits of Student loan relief extension - COVID-19 are mentioned below :
Administrative forbearance is automatically applicable where collection for monthly payments is stopped and interest rate collection has decreased to 0%. This is valid until September 2020.
If you still choose to make payments during administrative forbearance, the interest rate is null, and your manual payment will be added to the principal amount. And also will be eligible for programs like student loan forgiveness.
If your loans are in default, the department of education has ordered to stop the collection till September 30.
If you have an income-driven repayment plan, suspended payments are qualifying payments. You’re still eligible for the Public Service Loan Forgiveness program.
You can contact (888) 856-2668– Find out the details on Student Loan Relief if you have federal student loans.
For private student loans - contact (888) 669-1064 for more details.
Other Student Loan Debt Relief Options
For any specific reasons, if you are not qualified, for HEROES or the CARES act, you can check the below alternative that can be helpful.
Income-driven repayment plan :
Choosing an income-driven repayment plan is advised as loan payments will not burden you because 15 % of your salary after expenditure is calculated as part of the repayment process. In cases where your job is affected during the pandemic, providing financial proof you can enroll for an Income-driven repayment plan that will later help you to work towards the PSLF program. To be eligible for the PSFL program, you must pay consecutive payments and wait nearly for 20-25 years to qualify for it. If you qualify for the same 10 years on repayment will be forgiven.
Private student loans :
CARES Act is not applicable to Perkins and private student loans. But a number of places like Illinois, Massachusetts, New Jersey, Vermont, new york and many others have reached agreements with lenders with the lenders to provide help to student loan borrowers.
In an administrative forbearance period, you don’t have to worry if you make late payments or even if you miss them.
Most of the lenders are providing a forbearance period of 3 months and can extend depending on your lender. Please check your lenders' website and also contact them to understand the relief programs your lenders offer.
Debt collection has also stopped for a period of 90 days.
During the forbearance period, it is said that lenders must send reports that the student account in good standing to the credit bureaus. All these measures are included in Student loan relief extension - COVID-19
Another way to get out of college debt is to choose the right repayment options :
You may ask for a pause in payments without any accumulation of interest or affecting your credit score poorly. If you are in a position where you cannot benefit from student loan relief programs, you can still negotiate for lesser payments or a pause in your payments. Approach your lender requesting flexible student loan repayment options even if you do not belong to states which have agreements with their lenders and servicers. Do not fall victim to Student Loan Relief Scams-COVID 19 during the pandemic.
Student loan refinancing: Student loan refinancing will help you get lower interest rates helping you save a lot of money in the loan terms. If you have variable rates, it is likely that your interest rates are lesser during the pandemic. If you have multiple loans it’s advised to refinance them. But do remember, it is not advised to refinance if your federal student loans to private as you will lose protection programs, forgiveness, Cares Act relief, etc.
Deferment and forbearance: After a certain period of consecutive payment, you are eligible to receive a deferment or forbearance, which helps you temporarily postpone or reduce your monthly payments.
Student loan forgiveness program: If you work in fields like military, education, healthcare, or public service you can qualify for student loans forgiven.
Student loan consolidation: Student loan consolidation helps in managing your payments timely. You can consolidate multiple loans into a single loan that will also decrease your interest rates.