Student Loan Deferral Extended
The Biden administration has again extended the payment pause for student loan borrowers, allowing borrowers an additional three months before they have to resume payments. Originally implemented in March 2020, the loan pause was scheduled to originally expire January 31. Now, the relief is extended until May 1.
According to CNBC, student loan debt in the U.S. has surpassed $1.7 trillion and burdens Americans more than credit card and auto debt, and around a third of borrowers are in delinquency or default. The average student loan monthly payment is around $400 a month. During the payment pause, most loans won’t collect interest.
Students are encouraged to contact MMCCU before applying for or deferring a student loan.
“When we are analyzing a loan request and the applicant has deferred student loans, we factor in the length of the deferral while taking into consideration what their effective payment will be once the deferral period ends,” said Jerry Litwaitis, VP of Lending at MMCCU. “Having deferred student loans does not necessarily mean the payment is completely disregarded. We may ask for proof of deferral along with the anticipated payment once the deferral ends.”
“Taking advantage of paying down student loans when interest is not being charged can help pay down outstanding balances quicker,” added David Murphy, MMCCU President. “Many student loans have lengthy repayment terms, typically resulting from accruing interest. During this interest-free time, all your payments may go directly towards principal, so your outstanding loan will cost you less in interest in the long run. If you can afford to make any type of payment towards your student loan, you will save yourself interest and reduce your repayment period in the long run.”
To learn more about student loans, click here.
