The coronavirus pandemic has heavily affected the United States and its residents, resulting in a one-time stimulus check. As the government mulls over the possibility of another check after four months, you might be wondering: Can student loan debt take your stimulus check? Your budget is already stretched at its max—especially if you are currently unemployed or furloughed.
The CARES Act
In addition to the nation-wide stimulus check, the federal government inserted a section in the CARES Act to provide urgent federal student loan help for federal student loan borrowers. For anyone who fits into this category, this legislation puts loans in an administrative forbearance, meaning that it halts monthly payments and temporarily suspends interest. Currently, this act is effective from March to the end of September, at which point loan repayments will resume.
How Does This Affect Me?
Since your federal student loan monthly payments will be set at $0 from March 13th to September 30th, you don’t need to put a penny from your federal stimulus check towards your loans. These $0 “payments” will count as full payments towards your loan forgiveness program no matter how far along in the program you are. Even if you were slated to start paying within the administrative forbearance, your payments will still be $0.
Depending on your situation, you might still want to make payments on your loans. If you are in a situation where you can afford to put money towards loans, this is the best time to make significant progress. Because your loans won’t accrue interest, making progress towards your loans will be more impactful. You won’t receive monthly statements the way you normally would, so it’s on you to contact your loan provider to make payments.
What About Private Loans?
The CARES Act does not cover private loans, but you may still qualify for some student loan relief. Check with your state or city’s government to see what kinds of assistance they are providing during these unstable times. If you need financial help to avoid student loan debt taking your stimulus check, Hope Credit has services to relieve financial stress from debtors. Call us to find the debt assistance you need.