Cue 41 million sighs of relief.

The student loan suspension was due to expire in less than two weeks, but is now expected to last at least until September 30, 2021.

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This is the third time that the federal student loan payment freeze has been extended. And depending on what happens next with the pandemic and the economy, it is possible that the freeze could be extended again this autumn.

Here are answers to some common questions about the federal student loan freeze and how it affects your payments:

1.

Does this mean that all student loans are on hold?

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Only some loans are on hold. Just like when the CARES law initially suspended student loans, this extension of the student loan freeze only applies to federal loans held by the Department of Education. So if you have Private Student Loans, Federal Commercial Loans, or Federal Perkins Loans held by your school, this freeze will unfortunately not apply to you. If you’re not quite sure what type of loan you have, contact your lender to find out.

If your loans do not qualify for this program and you are having financial difficulties, you can always contact your loan officer to ask them what your options are for changing your payment plan or putting your loans on hold. adjournment or abstention.

2.

And the interest? Will I end up owing more when this is all over?

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During the freeze, federal student loan payments are suspended and interest has been set at 0%. So you can rest easy knowing that your federal student loan debt is not increasing.

Additionally, the freeze suspended collection of applicable federal student loans that were already in default before the pandemic. But be aware that when student loan repayments resume, so will collections.

3.

What if I work on the civil service loan forgiveness? Will freezing payments undo my progress?

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As it is, borrowers must make 120 consecutive payments to be eligible for Public service loan remission. Fortunately, taking advantage of the student loan freeze won’t bring you back to square one if you are on the path to forgiveness. Instead, as long as the job requirements are met, suspended payments will continue to count towards your forgiveness goal.

However, reduced working hours could impact your status. According to Department of Education, you will need to continue working at least 30 hours per week for a qualified employer during the freeze to maintain your eligibility.

4.

Wait, I thought Biden was going to completely forgive student loans?

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While President Biden has noted in the past that he supports forgive $ 10,000 in federal student loans for all Americans, we are not there yet. After all, it’s only the second day.

It is certainly possible that more student loan relief or waivers are underway, but it is still too early to say for sure how and when this could be done.

5.

What should I do to take advantage of the payment freeze?

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Literally nothing. If your loans qualify, any automatic payments you may have set up have been automatically suspended and no interest will accrue.

But beware of scammers who might try to take advantage of the confusion during this time. If someone contacts you asking you to pay a fee to qualify for the student loan freeze, make no mistake about it. Likewise, if someone asks for your personal information in order to freeze your loans, contact your loan officer directly.

6.

Oops, I have already sent a student loan payment for the next month. Can I get a refund?

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You can of course! Indeed, according to the office of Federal student aid, you can contact your lender for a refund of all federal government-held loan repayments you have made since March 13, 2020.

7.

I’m in school right now. Will this gel help me with my loans?

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May be. If you go to school on a direct, unsubsidized federal student loan, it should normally earn interest now. However, thanks to the freeze, interest charges are not currently accruing on unsubsidized loans held by the government. This means that you may owe a little less than you expected when your loans come due.

8.

What if I want to make a few payments to get the advance on my loans?

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If you are able to repay your loans, absolutely you can. Any payments you make during the freeze will first be applied to interest or charges accrued before March 13, 2020. Then, once you pay those charges, all of your payments will go to principal, which is just a fancy word for the actual loan amount you have taken out.

The fact that your payments may reduce your principal more than usual during the freeze makes this a great time to keep making payments, if you can. Paying off the principal now means you’ll likely pay less interest later.

If you want to make payments during the freeze, you have several options. You can keep your loan in administrative forbearance, that is, in freeze mode, and contact your lender to make payments when you can. Note that you can even make partial payments that are lower than your usual bill as long as your loan is on hold. Or, you can tell your lender that you want to opt out of forbearance to be billed as usual.

9.

My federal student loans were in a grace period when the pandemic started. What happens when the freeze ends?

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Many federal student loans include a six-month grace period that begins when you graduate, drop out, or drop below half-time school enrollment. During the grace period, your loan payments are not yet due. If your grace period was supposed to end during the suspension and you have a qualifying government-held loan, your first payment won’t be due until after the student loan freeze ends.

ten.

Will my monthly payments stay the same once the freeze is over?

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It depends on your payment plan. For income-driven plans, if your income changes during the freeze period, you can expect to see a different amount on your bill when it comes due. If your income has stayed the same, so will your payments.

And if you’re using a standard, progressive, or extended payment plan, your agent will likely recalculate your monthly payments based on the principal, interest, and time remaining on your loans.

For any other matter that we have not addressed here, Federal Student Aid has a Coronavirus FAQ – or you can always contact your lender directly to ask questions about your particular situation. And if you have money in mind, check out our others personal finance publications.

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