(ConservativeHub.com) – Students and parents paying off education loans can breathe a sigh of relief: the forbearance break was extended on December 4th. Instead of ending on New Year’s Eve, the payment delay will continue until the end of January 2021. That’s great news!
Last week, the U.S. Department of Education extended the student loan forbearance break, which Congress authorized in the wake of the coronavirus pandemic, through the end of January 2021. Here's what you need to know. https://t.co/Ii4oYsI7Ha
— Forbes Advisor (@ForbesAdvisor) December 7, 2020
While the extension is sure to make life a little easier for students and their families over Christmas, it’s important to remember the forbearance period will eventually end. Payments will immediately become due once it does.
Here’s what you need to know
First and foremost, don’t delay unnecessarily. Waiting until the end of January to make arrangements may leave you in default. Not only can that damage your credit, but it may also make it more difficult to access relief programs in the future. If you haven’t heard from your servicer by the end of the year, reach out to them and ask for clarification.
You have the right to ask for a refund on any payments debited after March 13. However, you should think carefully about whether that’s wise. It might help you survive now, but you’ll simply have to pay it back when the forbearance ends.
Note that how forbearance ends will vary slightly between providers. Some may automatically initiate bank debits, while others plan to reach out or make arrangements first. Some intend to allow special requests for relief, such as general forbearance, payment arrangements, and consolidation, to those who are genuinely unable to pay.
Most importantly, don’t be too afraid or ashamed to ask for help if you know you’re going to need it. The pandemic left many families and students struggling. Relief programs are available, and they can help you bridge the gap until better times arrive.
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