What no student loan payments means for you

Those with private student loans will need to get directly in touch with their lenders to check into forbearance options. Otherwise, they may find themselves settled with additional debt or a bleak financial outlook.
happy woman paying loans

A good education is one of the greatest benefits to life that an individual can hope to ever pursue. Sadly, paying for that education can often be challenging. Never has that fact been more true than in the wake of the COVID-19 pandemic. Now, with many people facing cut hours or out of work entirely, it can seem like the job they fought for is doing little to pay off their student loans. While the government has provided certain legislation to help postpone student loan payments, not everyone is eligible for this debt relief. If you’re one of the many individuals drowning under student debt in these uncertain times, there is still light at the end of the tunnel and hope for your future.  

CARES Act Student Debt Relief

Thanks to the CARES Act, many individuals across the USA saw their student loan payments immediately put to a halt. Through additional measures and long-lasting forbearance, most people are able to login to their loan services’ website and see that they have no outstanding payments due. This forbearance period is set to last throughout December 31, 2020 (due to an extension from the previous September deadline), giving people a chance to catch up financially. Unfortunately, this pause in payments and interest fees is only available for those who have federal student loans — individuals with private student loans are completely unprotected.  

Options for Those with Private Loans

Those with private student loans will need to get directly in touch with their lenders to check into forbearance options. With no legislation in place to protect those with private loans, you should expect that even those lenders that offer forbearance will not make the process easy to navigate. Most likely, the forbearance period will end with a hefty sum of added interest and the possibility of lump-payments due at once or the skyrocketing of interest due to additionally accumulated sums. 

What’s the Answer?

If you have a private student loan and are struggling to make ends meet, you need to contact your lender to see what forbearance plans are offered. Take into careful consideration the long-lasting consequences of forbearance and the amount of fees that will accumulate as you postpone payments. If you are relatively sure that you can catch up once the time limit ends, your lender’s forbearance plan maybe your best option. If the bills simply seem unmanageable, speaking with a bankruptcy lawyer could provide new solutions to regaining your financial footing you are not aware of yet. 

Is Bankruptcy Really Best?

You worked hard for your education, and now you shouldn’t be punished for it with financial ruin. Thanks to a Chapter 7 or Chapter 13 bankruptcy, you can see your student loans refinanced into more manageable payment plans or even forgiven. After filing for bankruptcy, you can start to rebuild your life and watch as you finally keep what you are earning thanks to your education.

Bankruptcy is no one’s first go-to thought when things get tough; however, the pandemic has made bankruptcy vital and lifesaving for many families across the United States. If you are struggling under crushing student loan debts, contact us today to discover what your options are and how to best recover your financial freedom.

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