In the midst of the COVID-19 pandemic, the federal government as well as New Jersey Governor, Phil Murphy, have taken action to aid those paying off student loan debt. For those struggling financially as a result of the Coronavirus, there are relief available options available to pause student loan payments.
Federal student loan relief has been granted to those paying off debt from their education. On March 13, 2020, President Trump provided relief to those with federally held student loans in order to support individuals impacted by the Coronavirus pandemic. All federal student loan interest will be waived for 60 days with potential extension past the 60 day deadline. This will give debt payers the ability to suspend payments for the next couple of months without accruing interest. This should come as a relief to those struggling financially as a result of the Coronavirus pandemic.
If you decide to continue making payments towards your federal loans, you will not be impacted by these recent changes. Those who decide to continue paying their loans may end up better off as the payment will be applied to the principle balance. If you are a borrower seeking public service loan forgiveness (PSLF) or have manageable payments through a repayment plan, it might be in your best interest to remain contributing towards these loans. However, if you need support during this time accommodations will be made for you.
Governor Phil Murphy has also announced the relief of student loan borrowers through the New Jersey College Loans to Assist State Students (NJCLASS) program.
Higher Education Student Assistance Authority (HESAA) has never charged NJCLASS borrowers with late fees while paying off their student loans. HESAA plans to continue this system devoid of late fees throughout the Coronavirus pandemic. Any borrower who is facing difficult times due to unemployment or illness as a direct impact from this disease can apply for NJCLASS loan relief for temporary disability or unemployment.
Those facing financial hardship as a result of the COVID-19 crisis are also eligible to receive relief from student loans through NJCLASS. This will help those who are not officially unemployed but still facing turbulent times due to the Coronavirus. Those facing decreased income as a result of COVID-19 and social distancing observance, such as individuals who rely on tips in the restaurant business or small business owners, will benefit from the NJCLASS financial relief. These applications will be reviewed with greater flexibility given the circumstances of the nation.
Student loan accommodations were also made within the Coronavirus Aid Relief and Economic Security (CARES) Act. Employers are allowed to make a student loan repayment of up to $5,250 to employees tax-free from now until December 31, 2020. The amount reflects both new student loan repayment benefits and other education assistance provided by an employer under the present law. The student loan must have been acquired by the employee and only applies to the payments made by the employer.
For more information about the CARES Act, click here → or consult with an Alloy Silverstein accountant and advisor. Contact us today.
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