If you’re still working the next several months could offer an opportunity to get ahead on student loan debt.
Federal education loans have been automatically suspended for the next six months. The forbearance was part of the CARES Act and exempts individuals with a federal student loan from payments through the end of September.
The interest rate has also been dropped to zero, which is a big savings, for those who can continue making payments.
“If you wish to continue paying your loans during the administrative forbearance period, or to pay more or less than your regular payment amount, you are free to do so…Continuing to make payments during the administrative forbearance could help you pay down your loan balance more quickly because the full amount of a payment will be applied to principal once all interest accrued prior to March 13, 2020, is paid,” the federal response website reads.
That in mind, even a smaller-than-normal payment goes directly to the core balance. The only catch is that any prior accrued interest on the loan must be paid first, before those principal payments can begin.
Automatic withdrawals have been put on hold, too.