TUCSON, Ariz. — Part of the CARES Act helps people with student loans. Loan borrowers from the federal student loan system can receive expanded relief until Sept. 30, 2020.
All student loan payments have been put on hold until then, and subsequently, there is an interest rate of zero.
"That means that balance is going to be the same when it was on March 30 as it is on September 30th. So any payments that you can make during this time period, would go directly toward your principal,” said Tiana Ronstadt, a financial advisor with Power Women Investing.
If you have the opportunity to make payments now, that's a win.
The CAREs Act also gives your employer the opportunity to contribute up to $5,250 on your behalf toward your student loans, without any tax implications to you.
"What that means is, that hypothetically, instead of me receiving income from my employers and then turning around and paying off my student loan, we'll there's taxes involved in that whole flow of money. This is your employer could actually pay down portion of your student loans for that 5,250 cap,” said Ronstadt.
This relief through an employer is valid through Dec. 31, 2020.
Employers were always able to contribute toward your student loans, but there is a reason why this could be a benefit to you. "Its been where it’s a pass through, and so what this legislation allows us to do is or the employer it eliminates that pass through and allows us as an employers to potentially help an employee pay off that student loan, obviously, a little faster,” said Ronstadt.
As a reminder, this is legislation, meaning this will not affect your credit and it won't count as a break in loan forgiveness programs.
If you're unsure how to contact your loan servicer for more information, you can visit the studentaid.gov/login or call 1-800-4-FED-AID.