Steps to Take if You’re Struggling to Pay Student Loans – HerMoney
- May 11, 2020
- By: Greenpath Financial Wellness
From HerMoney, featuring GreenPath’s Jeremy Lark, Senior Manager for Client Services. Read the steps to take if you are struggling to pay student loans.
If you are struggling to pay student loans, it can be helpful to understand the financial relief benefits in the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The economic stimulus bill provides student loan relief for borrowers with federal student loans.
Although the laws don’t relate to privately held loans, there are still steps you can take. You’ll need to use different savings strategies if you’re suffering financial hardship due to the COVID-19 crisis.
This HerMoney article summarizes steps to take if you’re in a financial bind, including insight from GreenPath:
Contact Your Private Loan Servicer
Those with private student loans are not covered by the new agreement. That’s OK. Find your loan servicer’s contact information on your latest bill, or head to its website. Most have a page dedicated to COVID-19 that explains borrower options and how to contact the company.
When you contact your loan servicer, explain your situation and how you’ve been impacted by the coronavirus. “The majority of private lenders have been willing to work with borrowers on things like 60- to 90-day payment deferments,” says Jeremy Lark, senior manager of client services at GreenPath Financial Wellness.
Some loan servicers may also provide student loan relief by waiving certain fees or working out a new payment plan to keep your account in good standing.
Make sure you understand how forbearance works. Typically, you can skip payments for a few months. But interest will continue accruing and may even be “capitalized,” or rolled into the unpaid principal. That increases the cost of your loan.
Reallocate Money in Your Budget
Those struggling with student loans should look at the big budget picture.
Lenders, insurers and utility companies are offering their own forms of assistance during the crisis, Lark points out. “Money that normally would have been used to cover these costs can be redirected to cover loan payments,” he says. It can help keep your account in good standing, at least until you reach an agreement with your private student loan servicer for student loan relief.
Consider Nonprofit Credit Counseling Services
The HerStory article concludes with a reminder to reach out to a nonprofit credit counseling agency. Caring, judgment-free one-one-sessions are available to you from the nonprofit GreenPath Financial Wellness.
To learn more steps that you can take and to read the full HerMoney article, click here.
GreenPath Is Here To Support You
Our financial counselors are available to talk about debt and financial wellness. Student loans are part of the picture. One-on-one counseling will help you identify options that can relieve financial stress and make it easier to manage finances.
Jeremy Lark is dedicated to combating financial strife and stress through financial wellness, education, and technology. Through his work as Senior Manager of Client Services, he has helped GreenPath’s clients find the tools and resources they need to turn their lives around. Jeremy has been with GreenPath for 12 years, and while a born-and-bred Yooper, currently resides in the Detroit area.