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Should You Make Student Loan Payments During Forbearance?

By NADINE GALLLutheran Social Service MN Great news for folks with federal student loans! The relief from loan payments due to the pandemic ”” also known as a forbearance ”” has been extended through September 30, 2021. This means that no payments will be due and no interest will accrue for federal loans during this time. For those who are unable to afford their payments, this is wonderful news. It”™s also great news for anyone still able to make student loan payments. Why Make Student Loan Payments if No Payments Are Due? To pay it off faster. Without interest accruing, 100% of your payment goes toward the principal loan balance, instead of part of it going toward interest.  If you want to pay down your loan even faster, consider making slightly higher payments right now. To bring your loans current. If your loans were past due before the forbearance period, they”™re still reporting past due. Bringing your loans current will help you improve your credit score. If you”™re unable to make ongoing payments, just paying the past due amount will help. To rehabilitate defaulted loans. If you”™re in default, now is the perfect time to rehabilitate your loans. The payment and interest relief includes defaulted loans. This means you”™ll get credit for payments, but you don”™t have to pay through at least September 2021. If you can make payments, as indicated above, 100% will go toward the principal balance. Contact your loan servicer to determine your options for getting out of default. Who Might Not Benefit from Making Payments? Borrowers seeking loan forgiveness. During forbearance, you”™re getting credit for payment. Making payments won”™t help you meet the required number of payments faster. However, should something happen to make you not qualify for forgiveness in the future, you”™re not reducing your loan balance [...]

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