How to manage student loan repayments during the pandemic
GREEN BAY, Wisconsin (NBC 26) – The pandemic has changed the way we manage our finances. This includes the repayment of our student loans.
Due to the CARES Act, all interest and payments have been suspended until the end of the year on federal student loans.
A financial expert from UW-Green Bay said there are two ways to handle this scenario.
You can continue to pay your monthly payment. This way, all the money will go directly to the principal, which will allow you to pay off the loans faster.
The other option is to ignore payments until the end of the year to free up money to meet your household needs.
“Loan money is important right now,” said Preston Cherry, assistant professor of personal financial planning at UW-Green Bay. “There is still uncertainty and there will be until the end of the year and probably until 2021. To build up liquidity, emergency liquidity or liquidity preparation is important.”
Experts say the best way to go is to use your money to pay off higher interest credit card debt.
Another thing to keep in mind is that the suspension of payments and interest only applies to federal loans.
If you have private loans that do not apply, then you will need to call your bank or agent to negotiate these rates with your private loan provider.
If you are looking for additional information on managing your student loans, you can consult the AFSFA website.