Spring college graduates typically begin repaying their student loans in November. But this year, things are different.
Most federal student loans come with a six-month grace period before new graduates have to start making payments on their college debt. Because of the pandemic, however, repayment of most types of federal loans has been automatically suspended until the end of the year.
That means recent graduates won’t have to start making payments until January, unless the government extends the payment “pause.”
Advocates for student loan borrowers say a delay beyond January is needed. But it’s uncertain if that will occur, given the contentious negotiations between Democrats in Congress and the Trump administration over further pandemic relief ahead of the Nov. 3 presidential election.
“We really do need an extension of this payment suspension,” said Persis Yu, director of the Student Loan Borrower Assistance project at the National Consumer Law Center. “It’s a really terrible situation for borrowers.”
The class of 2020 graduated into a job market with historically high unemployment. While the jobs picture had been improving over the summer and early fall, jobless claims have been volatile and more companies are announcing layoffs. Nearly a third of college students agree that the pandemic has placed extra financial stress on their family, according to a new survey by AIG Retirement Services, a provider of retirement plans for universities and public sector employers, and EverFi, a provider of online education programs.
Since more help may not arrive, however, now is a good time to consider whether you’ll need a repayment plan that’s more affordable based on your income,