Got a federal student loan?

Update: On December 22, 2021 the pause on federal student loan repayments was extended for an additional 90 days — through May 1, 2022.¹

Here is what you need to know. For those of you who have an outstanding federal student loan, likely you have been enjoying a pause in repayments. This forbearance came on the heels of the economic relief provided to many due to the pandemic. Although Covid-19 is still here, the forbearance program will not be for long. The final extension has been granted by the U.S. Department of Education but only until January 31, 2022.

"The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency," said U.S. Secretary of Education Miguel Cardona. "As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment. It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education."2

Loan servicers are in the process of updating their communications and will begin notifying borrowers of this final extension and how to plan for repayment restart as the end of the ‘pause’ approaches. You should expect to hear from your servicer(s) over the next few weeks, if you haven’t already. So how can you prepare? 

What do you have to do? 

First, review your student loan information. Know your servicers, repayment status, monthly payments, interest rates and the balance of what you owe. If you are not sure you can visit the FSA site. 3

TIP: If you are employed, ask your employer if they offer any type of student loan benefit to help support your repayment options.

Will you be required to make payments on your federal student loan when the forbearance expires? 

Yes. Failure to do so could result in your loan(s) being placed in default, which can negatively affect your credit and overall financial wellness. If you are a recent graduate and still in your grace period, you are not required to make repayments for up to 6-months. Verify this with your loan servicer to be sure. 

What action will I need to take when payments are expected to resume? 3

Confirm any automatic payments are up to date with your servicer and budget accordingly for the required monthly payment. 

If you are not on automatic payments, be sure you are making your monthly payments on time. Your servicer can help you with the best options. 

What if you cannot afford your loan payments come January? 3

You may have the potential option to lower your monthly payments via a government repayment program that will consider your discretionary income and set a new more manageable rate for you. 

With a little planning, you can get back on track to reducing your student loan debt and becoming financially well.  
 

¹ US Department of Education, Biden Administration Extends Student Loan Pause Until January 31, 2022, press office, August 6, 2021, Biden Administration Extends Student Loan Pause Until January 31, 2022 | U.S. Department of Education , last accessed November 3, 2021, quote “The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency," said U.S. Secretary of Education Miguel Cardona. "As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment. It is the Department’s priority to support students and borrowers during this transition and ensure they have the resources they need to access affordable, high quality higher education."¹

² Federal Student Aid, Department of Education, studentaid,gov, an official website of the United States government, Home | Federal Student Aid , last accessed November 17, 2021, secondary pages that contain information above last 2 paragrahshttps://studentaid.gov/announcements-events/covid-19 , last accessed November 17, 2021

This material is provided for general and educational purposes only. Neither Voya ® nor its affiliated companies or representatives provide tax or legal advice. Please consult a tax adviser or attorney before making a tax-related investment/insurance decision.

 


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