For nearly two years, individuals who took out federal student loans haven’t been required to make payments due to the COVID-19 Emergency Relief. However, on January 31, 2022, that relief plan is ending. Below we outline what that means for those who have federal student loans.
With the relief plan in place, individuals weren’t penalized for not making payments on their federal student loans. Individuals could have chosen to make payments still, but there was no obligation to do so.
Once the calendar turns to February 1, 2022, payments will need to be made again as they previously were. If individuals had reoccurring payments set up previously with their student loan company, that company may have already reached out asking if they would like to continue reoccurring payments. That is so companies can ensure they have the correct financial information for the individual.
If an individual was paying a certain amount before the relief plan was in place, it does not necessarily mean they will continue paying that same amount once payments are reinstated. This is because those on a Standard, Graduated, or Extended Repayment Plan may have their loan recalculated to represent a new amount (which could be higher or lower than an individual was paying before). For individuals on an income-driven repayment plan, their payment will be the same as before the relief plan was in place.
Complications with Repaying the Loan
For some individuals, the toll of the pandemic may make it impossible to repay their student loans. Unfortunately, as of now, there are no additional COVID-19 related loan forgiveness options for individuals. However, there are other potential options available for student loan forgiveness.
When it comes to student loans and bankruptcy, there are other options individuals can explore. The team at Licata Bankruptcy Firm is available to go over these options with you. We will look over your financial portfolio and see what the best route could be for you. With a free consultation, you have nothing to lose — contact us today online or by phone. (417) 213-5006