Last week, the House of Representatives passed the HEROES Act and now it's up to the Senate to push the bill further along. This bill would provide over $3 Trillion in relief, including some much needed student loan relief, hopefully. The bill looks to send more stimulus checks and expand unemployment benefits. It also includes some student loan relief for certain borrowers. While the bill has yet to pass and is subject to change, there's still hope for those struggling with student loans.
What the HEROES Act means for your student loans
The HEROES Act that passed the House also includes relief for many student loan borrowers. Most Americans making under $100K a year can expect another $1,200 stimulus check. However, some may even be eligible for up to $10,000 in student debt relief.
The CARES Act (the first coronavirus aid bill) originally suspended all interest and payments on federal loans until September. The new HEROES Act extends that through September 2021, a whole extra year of relief. It also expanded that suspension to include Federal Perkins Loans and other loans that weren't originally covered.
Another benefit is that the new act also covers private student loans. That's right, payments and interest will also be suspended if you hold private student loans. Student debt relief for private student borrowers like this has never been available before. The $10,000 in student debt cancellation will also cover private student loans if you are eligible.
What should I do about my loans?
Well if you have federal loans and don't have to pay interest on them, it can be a great situation. However, it's still wise to pay down the debt when possible, because when interest starts up again, it can build up fast. Although, if you expect further relief in the future, like debt cancellation, you can always wait and see.
One way you can pay off the debt and wait to see what happens is to just put the money aside. If you save some extra money that you would put towards paying off your student debt. You can put that change in a high-yield savings account to accumulate some interest and wait to see if you even need it.
Be warned, this bill is still being reviewed by Senate and can change or get wiped away completely. While it includes many student loan benefits, there is a chance that the final version (if there is one) may not include some or all of the benefits listed.
