Student loan debt was already making news when COVID-19 hit in 2020. The Coronavirus Aid Relief and Economic Security (CARES Act) was first passed by President Trump on March 27, 2020, with the goal of helping people with their federal student loans. However, the protections expire in September 2021. If you struggled with federal student loan payments before CARES, take action now. It takes at least 45 days to get a payment plan in place. Don’t fall further behind in payments. Contact us today and talk to a student loan lawyer in Chicago.
What does the CARES Act do for student loans?
Presidents Trump and Biden each extended the effective timeframe for the protection of the CARES ACT. Currently, the benefits expire on September 30, 2021. For qualified loans, the CARES Act reduced interest rates to 0% and suspended payments. It also stopped wage garnishments and collection attempts if you were in default. It’s important to note that not all student loans qualified under the legislation.
What loans qualify for protection under the Cares Act?
According to the U.S. Department of Education, only federal student loans held by the Department of Education are eligible for protection. Some Stafford/FFEL and Perkins loans may not be covered, especially if your loan is in good standing and you make payments on time. Depending on your circumstances, you may not benefit from the CARES Act and must continue paying these loans even while other loan payments are suspended.
The Federal government subsidizes some federal student loans but does not own them. This is the major difference as to whether CARES covers them.
Are there exceptions to student loan protection under the CARES Act?
Despite the fact that the CARES Act attempts to clearly define which loans qualify for protection, there are several exceptions. Some loans can become federal-owned loans based on the status of the loan, your status, or various other circumstances. Understanding eligibility requirements, how they apply to your loan and what it means, in the end, is best accomplished with the help of a trained student loan lawyer. Making a mistake can cost you dearly with a severe negative impact when the CARES Act expires or potentially sooner.
How does a student loan lawyer help me?
A trained, experienced student loan lawyer understands the specific circumstances of the loan cycle. They can help you understand your loan status and the strategies you can implement during the protection period and after the CARES Act expires. Knowing how to position your loans now can help you avoid collections, make it easier to plan your finances, and ease any stress you have on this topic.
Contact us today to set up an analysis of your student loans. Take steps to make sure you are prepared and don’t get stuck in the middle when CARES expires.