0% Interest on Student Loans | Student Loans Suspended

On March 27, 2020, the President and U.S House of Representatives passed the CARE Act, under which STUDENT LOAN payments will be SUSPENDED and acquire a 0% INTEREST for 6 months. In this video, we discuss the background, implications, and provide some advice to pay down some debt and fast track yourself to FINANCIAL INDEPENDENCE.

Recent reports have stated that The United States Student Loan Debt has reached an astonishing $1.6 trillion dollar (that’s $1,600,000,000,000) deficit with over 27 million Americans holding Student Loan Debt. That is an increase of 116% in 10 years and represents the country’s most significant and widespread financial burdens to date. In 2018, the average amount of debt a graduate healthcare provider holds are roughly $200,000.00 and the median amount of debt that an undergraduate pre-medical student may have is $195,000.00. That is A LOT of money, accruing interest DAILY, and haunting many healthcare professionals after graduation.

On March 13, 2020, the President declared COVID-19 a national state of emergency, and with that came some changed to student loans. The FIRST being, that federal student loans, under the Department of Education, have been suspended for 60 days. And SECOND, the notion of temporarily waiving federal student loan interest, which was not fully implemented until March 27, 2020. Now, all FEDERAL student loans, under the Department of Education, with the EXCEPTION of Perkins Loans and Federal Family Education Loans (FFEL), are suspended and hold a 0% interest for 6 months (September 30, 2020).

The new stimulus signed under the CARE Act came with some additional benefits towards student loans. Eligible borrowers, meaning borrowers NOT in default or currently in forbearance or deferment, may suspend their federal student loans temporarily and accrue 0% interest as well WITHOUT doing anything (however, we recommend contact your servicer for proof of suspension). PERSONAL, PERKINS, and FFEL are NOT included in the suspension and you must contact your servicer to see if they will work with you during this time. During the 6 month time period, the Department of Education will basically CONTINUE to pay your monthly payments, which is awesome if your payments fall under the Loan Forgiveness Programs provided by the Department of Education. However, if you wish to continue to make payments towards your student loans, NOW is great time to do so. Any additional payments will go towards any previous accrued interest and then start attacking down the principle…which starts lowering the balance…which gets you on the path to FINANCIAL INDEPENDENCE faster!

In respect to individuals whom have defaulted on their Federal Student Loans in the past, under the CARES Act, there will be NO garnishment of wages, Social Security, and Tax Refunds (if already filed for the 2019 year). If you have defaulted on your Federal Student Loans in the past 270 days, the federal government has halted garnishment of wages, Social Security, and Tax Refunds for student loan debt collect through September 30, 2020.

Many student loan borrowers participate in various re-payment plans that the Department of Education provides, such as: Public Loan Forgiveness (120 monthly payments) and Income – Driven Based Repayment Plans (20-25 year payment plan). Under both plans, for the next 6 months, all Department of Education payments will count towards your re-payment plan term. This gives you some FREE TIME to catch up! And with the recent fed rate interest cuts, now be the time to refinance your student loans at a lower interest rate if your financial situation allows.

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DISCLOSURE:
We are not financial advisors. The ideas and concepts presented in this video are personal opinions and for entertainment only.

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