6 things to know about student loans during the coronavirus
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If you have federal student loans, help is on the way. But be patient – it may take a week or two for the changes to be applied to your account. Check your student loan account regularly and pay attention to updates posted on your loan officer’s website, as well as on the Federal Student Aid Coronavirus Information Page. If you have to call your student loan officer, expect to wait longer than usual to take action.
If you’ve suspended your payments, check your credit reports
At May 20 Politico reported that the federal student loan manager Great Lakes Educational Loan Services provided incorrect information on nearly 5 million loan payments from borrowers to the three major consumer credit bureaus, Equifax, Experian and TransUnion.
Why it matters: Under the CARES Act, if a student borrower chose to defer their monthly payments between April and the end of September, each suspended payment had to be reported to the offices as an on-time payment. However, due to a coding error, Great Lakes reported these payments as “deferred”. As a result, some borrowers have found that the “deferred” payment status on their credit reports is hurting their credit rating. And any negative information on your credit reports could potentially influence how lenders, landlords, and employers view you in the future.
Great Lakes said it was working quickly to resolve the issue. In the meantime, if your student loans are managed by Great Lakes, you should check your credit reports. Here are some ways to do it for free:
- Until April 2021, you can view your credit reports from all three bureaus for free once a week at AnnualCreditReport.com.
- Credit Karma provides free credit reports from Equifax and TransUnion.
- Experiential offers free access to your credit report once every 30 days.
If you find that your suspended loan payments have been incorrectly reported as “deferred,” upload a PDF file of your credit reports for your records, then call the Great Lakes and request that he change your payment status with the three bureaus. (But be prepared to spend a lot of time on hold.)
How the Stimulus Package Affects Federal Student Loans
the $ 2 trillion stimulus package promulgated by President Donald Trump on March 27, 2020, provides some relief to federal student loan borrowers until September 30, 2020.
The Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) – which will provide checks up to $ 1,200 to many Americans, increased unemployment benefits and forgivable loans for small businesses, among other relief measures– also develops the President’s directive of March 13 concerning the waiver of interest on federal student loans.
The Education Department will likely release more guidance on what the CARES Act means for student loan borrowers, said Ben Miller, who previously worked in the Office of Planning, Assessment and Development. ministry policies, and is now vice president of post-secondary education at the Center for American Progress, an independent, non-partisan political institute based in Washington, DC.
“Congress drafted the bill quickly,” Miller said. “There are only so many details.”
Based on what we know now, here’s what the stimulus package means for people with federal student loans and what borrowers with private student loans can do.