President Trump passed the Coronavirus Aid Relief and Economic Security (CARES Act) on March 27, 2020. One of the primary goals included helping people with their student loan debt. Trump extended the benefit length twice and President Biden extended its protection through September 30, 2021. The CARES Act stops wage garnishments and collection attempts if you have been unable to make payments and reduces interest rates to 0%. If your loan qualifies and you are in default, it suspends your need to make a payment. It’s important to note that not all student loans in California are eligible.
What loans qualify for protection under the CARES Act?
FSA.gov states that federal student loans held by the Department of Education are eligible for protection. If you make payments on time and your loan is still in good standing, some Stafford/FFEL and Perkins loans may not be covered, especially if your loan is in good standing and you make payments on time. Depending on your circumstances, you may not benefit from the CARES Act and must continue paying these loans even while other loan payments are suspended.
If your federal student loans are subsidized but are not owned by the federal government, they may not be covered by the CARES legislation.
Are there exceptions to the protection for student loans under the CARES Act?
The CARES Act attempts to clearly define which loans qualify for protection, but there are several exceptions under some specific circumstances. For example, some loans can become federal government-owned loans based on the loan’s status , your status, or in other situations. Understanding eligibility requirements, how they apply to your loan and what it means in the end is best accomplished with the help of a trained student loan lawyer. Making a mistake can result in a severe negative impact to your finances and credit score when the CARES Act expires or potentially sooner.
How does a student loan lawyer help me?
A trained, experienced student loan lawyer understands the loan cycle. They can help you understand your student loan status and determine which strategies you can implement during the protection period and after the CARES Act expires. Positioning your loans now can help you avoid collections and make planning your finances easier, easing any stress you have about paying them back. Contact me today to set up an analysis of your student loans. Don’t get stuck in the middle when CARES expires, act now.