With the advent of the Covid 19 pandemic in 2020, the economic and financial strain on majority of Americans doubled and this led to the enforcement of emergency relief measures by the government. One of these included the freezing of federal student loans payments in March 2020. Fortunately, the reinstatement of this loan scheme has been slated to kick-off early next year.
To answer important questions on the issue, F.H. Cann & Associates Inc., a company with many years of loan servicing experience, has granted an interview.
When is the student loan payment scheduled to restart and how feasible is it for debtors?
Since the halting of payments in early 2020 due to the pandemic, students in debt have had over 20 months of not repaying their loans. There were earlier attempts to resume payments, but those dates were extended.
The current scheduled date for the end of the loan relief is January 31, 2022, and payment is to start on February 1, 2022.
Sadly, there are concerns that many people are yet to recover from the severe financial consequences of the pandemic and that student loans are only going to burden them further.
What effects will the restarting of loan payments have on loan servicers themselves?
Loan servicers are going to face a surge in their engagement. Majorly, the effects would be the need to employ more hands on the job.
The logistics of restarting the student loan payments is something loan servicers are going to try to handle. In addition, loan servicers are saddled with the responsibility to communicate with debtors and provide facilities, financial options and plans to make the payment of student loans affordable.
This is something we offer as a part of our many services at F.H. Cann & Associates Inc.
Does the restart mean that student loan forgiveness is no longer possible for debtors?
Definitely not. The resumption of loan payments does not remove the possibility of loan forgiveness if they meet the requirements.
Certain individuals are eligible for loan forgiveness and debtors should make enquiries on whether they can get one.
What steps should debtors follow in preparation for the restart?
It has been months since student loans were last paid and people are still battling with the economic downturn caused by the pandemic. In preparation, student loan debtors should make sure they contact their loan servicers as early as possible to clear any doubt they have and seek a favorable payment plan.
Personal Information should also be updated in case there has been any changes over the pandemic.
Is there a possibility of another extension for the restart of loan payments?
It has been made clear that there wouldn’t be any extension to the date for restarting student loan payment. However, with the low number of student loan debtors ready to take on the burden of loan payment, an extension may be considered.
Also, with the discovery of the new omicron variant of Covid 19 and the effects it may have over the next couple of months, an extension is not farfetched.
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