Discovering how to keep up with the monthly payments of student loans is one of the many challenges for those who have lost their job.
Many more people now face that headache. Employment cuts are increasing, partially fed by federal workers.
More than 40 million Americans have student loans, and total debt in circulation exceeds $ 1.6 billion.
This is what you should know about payments if you are not at work.
A bad time to look for lower payments
Federal student loan borrowers who are fired from their works can generally register in a income -based payment plan and obtain a lower payment, or even an invoice of $ 0, while they are unemployed.
IDR plans limit the monthly payments of the borrowers to a part of their discretionary income and cancel any remaining debt after a certain period, generally 20 or 25 years.
However, at this time, borrowers cannot access applications for IDR plans.
The interruption is due to a recent decision of the United States Court of Appeals that blocked the new IDR Plan of the Biden Administration, known as salvation or savings of valuable education. He also blocked the loan forgiveness component under other IDR plans.
As a result, borrowers can also face temporary challenges if they are already in an IDR plan and try to go through the recertification process that allows them to obtain lower payments if their income has changed, or ceased. (Borrowers who were registered in rescue remain in tolerance and do not have to make payments for now).
The lack of access to the IDR plan and access to rectification is “enormously harmful, especially in this particular moment when thousands of people are being fired or fired,” said Persis Yu, deputy executive director and managing advisor at the Student Borrower Protection Center.
It is not clear when IDR plan applications will be available again.
While you can be caught in your current payment plan at the moment, you still have options, they say consumer defenders.
Unemployment postponement for student loans
“If the use of a borrower ends, you may want to request a postponement of unemployment,” said Higher Education expert Mark Kantrowitz.
The borrowers can be eligible for this pause in their payments if they receive unemployment benefits or are looking for and cannot find full -time employment, among other requirements, Kantrowitz said.
Relief can last up to three years.
Another option that allows you to suspend the invoices of your student loans is the economic postponement of difficulties. Additional and less known postponements include the postponement of postgraduate scholarships, military service and the postponement of postactive services and the postponement of cancer treatment.
Student loan borrowers can also be eligible for general tolerance.
Every time a borrower applies for a period of lack of payment, he must find out if the interest will accumulate in their debt in the meantime. If so, they will have a greater balance when their payments resume. Making payments during the postponement or tolerance to at least cover the interest of the loan on its debt can avoid that result, Kantrowitz said.
Those with loans for private students can find that they have fewer options. However, experts recommend explaining to their lender to have lost their job and ask what relief could be available.
