The United States has a lot of debt in the form of student loans. According to Forbes, the debt is somewhere around $1.56 trillion.
The student loan debt crisis has been a growing problem in the country in recent years and the statistics in 2020 show how serious it exactly is, across all demographics and age groups. There are an estimated 45 million borrowers, with the amount being nearly $1.6 trillion. It is now the second-highest consumer debt category in the country after mortgage debts. It is higher than both credit card debts and auto loans. The average student loan debt stands at around $33,000. It is a large amount and many of them find it difficult to pay back.
Student Loan Relief during COVID-19!
The COVID-19 pandemic has brought the entire world to a standstill. Thousands are dying each day with no proper cure being developed yet. The numbers are only rising while the economy takes a huge hit. Probably the biggest one since the great depression of 2008. Amidst these circumstances, the students find it even more difficult to repay their debts.
The government has, however, come up with a new federal law called the Coronavirus Aid, Relief, and Economic Security (CARES) Act which provides automatic suspension of principal and interest payments on student loans held federally through 30 September 2020.
Is there a need to apply for suspending payments on federally held student loans?
No, there is no need to apply separately for the suspension of payments during the pandemic. The interest rate has been set to 0% and payments are being suspended for student loans. This has started from 13th March and is expected to run through at least September 2020. The loan servicer will suspend all payments and interests without any action from your side.
In case, you made a payment towards your loan after 13th March, you are eligible to ask for a refund if you need it. And if you are able to pay the amounts regularly, it will help you clear the debt a lot faster as the payments are directly applied to the principal.
Is the suspension applicable for private student loans?
The suspension of payments is applicable for student loans held by the federal government. The benefits of the CARES act are not applicable for loans owned by credit unions, banks, schools or any other private entity. However, most of them are providing some benefits or the other to cope with this dire situation.
Do I need to pay any fees for suspending the payments?
If you are getting calls asking you to pay a fee to suspend the payments, you are being scammed. The federal government will not ask for any kind of fee whatsoever to suspend the payments. There is nothing that you need to do separately.
Confirmation about the suspension of payments:
You will receive notifications regarding the suspension of your payments from your servicer. So there is nothing to worry about.
How to avoid harassment at this time?
If you have student loans with the government, there is absolutely no need to pay till at least September 2020.
However, if you have loans with private entities you might have to pay. Most private entities are providing relief and various payment options to ease things for the customer.
Remember that no one has the right to harass you and use illegal methods for collecting the debts, especially at this hour of crisis.
Hire a student loan debt lawyer if necessary:
If you feel, that you are being subjected to different forms of harassment by loan providers even in these times, you have the right to fight that harassment by hiring a trusted student loan debt lawyer.
The last thing you would want in this situation is harassment and humiliation.
So if you are facing unwanted calls and other forms of harassment, get in touch with a reputed student loan law firm like Legal Rights Advocates, PLLC and stop the nuisance now.
You are not alone in this and will get all the help you need from our experienced student loan debt lawyers. Get in touch with us to know more and preserve your rights! Call us on 855-254-7841 for free consultation.
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