As COVID-19 continues to cause school and business closures across the country, many student loan borrowers are facing unexpected changes in income and uncertainty around how to handle loan payments during this time. The Trump Administration’s recent announcement about waiving interest payments has further added to borrowers’ uncertainty about what to do.
At Summer, we’re committed to helping borrowers navigate and make sense of the complex student loan landscape. Many of you have reached out with questions so we wanted to provide some tips on how to navigate your student loan payments during this time.
- Consider enrolling in an income-driven repayment plan: If you recently lost your job or had a significant reduction in income, enrolling in an income-driven repayment plan could bring your monthly payments down as low as $0. This is a great way to free up cash that you may need for groceries and other important items. Per the recent government announcement, interest will not accrue on your student loan balance during this time. For a limited time, you can enroll in an income-driven repayment plan on our platform. While your application is being processed (which can take several weeks), you can also contact your servicer and request a temporary deferment or forbearance if you can’t make a payment that’s due soon.
- Update your existing income-driven repayment plan: If you are already enrolled in an income-driven repayment plan and your income recently decreased, you can recalculate your repayment plan to lower your monthly payments. You can recertify with Summer to lower your payments.
- Stay on track to meet forgiveness program requirements: Enrolling (or staying enrolled) in an income-driven repayment plan will help ensure that your monthly payments—even if reduced to $0—will count towards programs like Public Service Loan Forgiveness (PSLF). Time enrolled in either deferment or forbearance does not count towards the 120 qualifying months required to receive forgiveness under PSLF.
- If your income is stable, continue in your current plan: If you are fortunate enough to be working in a stable, salaried job and you’re able to make your student loan payments, you should continue doing so in your current plan. If you have private student loans, this may be a good time to think about refinancing them. The Federal Reserve recently lowered interest rates, which means that you may qualify for a lower interest rate on your loans. If you’ve already refinanced your loans, you may be able to do so again for an even lower rate!
As always, we’re here to answer questions—don’t hesitate to let us know if there’s anything we can do to help. Stay healthy, and know that Summer is on your side.