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How the Coronavirus (COVID-19) Relief Package May Impact Your Student Loan Repayment Strategy.

You’ve no doubt heard that Congress recently passed the biggest economic relief package in U.S. history. The benefits laid out in this bill will provide some relief to American citizens and businesses suffering during the COVID-19 crisis and will have long-ranging effects on our economy.

In December 2020, an Executive Order directed the Department of Education to extend the suspension of principal and interest payment on federally held student loans until January 31st, 2021. The Department of Education extended other student loan benefits in the CARES Act until January 31st, 2021.

In 2021, at the request of President Biden, the Secretary of Education extended the pause on federal student loan payments and collections, keeping the interest rate at 0% through May 1st, 2022.

As part of the package, Americans with qualifying federal student loans can expect:

  • A break from payments, March 13th, 2020 – May 1st, 2022
  • No new interest accruing on qualifying loans during this time period
  • The potential to reduce principal more quickly

You can find more information about this temporary student loan relief package at

This student loan relief helps many who will struggle financially at some point during the COVID-19 crisis, such as dentists and optometrists who have been forced to temporarily close their practices. Here’s what you should know before changing your student loan repayment strategy.

  1. Before making any decision, start by gathering your current student loan information.

    These are uncertain times for everyone, particularly medical professionals on the frontlines fighting this pandemic. If you’re not sure what to do about your student loans, start by gathering your federal loan information at All of your private and federal student loans will be listed on your credit report, which you can retrieve for free at Once you have that information, you can determine whether your existing student loans are covered.

  2. You’ll want to think carefully before refinancing federal loans during this time.

    While it may still be in your best interest to refinance your private student loans, you would lose access to the economic relief package’s benefits by refinancing your qualifying federal student loans. However, it’s a good idea to re-evaluate your situation when January rolls around, and the temporary relief package expires.

  3. Consider refinancing student loans that are not covered in the economic relief package.

    If you were in school prior to 2010, you may have loans from the Federal Family Education Loan (FFEL) program or Perkins loans. It’s important to note that privately held FFEL loans do not qualify for 0% interest or payment suspension. You will be expected to continue regularly scheduled payments on all privately held student loans. Contact your loan servicer to find out if your FFEL loans are held by the Department of Education, or by a private entity.

    If your FFEL loans are held by a private entity, you may find that you can obtain a lower interest rate by refinancing them. Contact us today to set up a complimentary student loan consultation, or find your interest rate to see if you could save by refinancing any of your private student loans.

  4. You could pay off federal loans sooner by continuing to make payments.

    If you’re not feeling a financial strain, consider continuing to make your regular federal student loan payments. For borrowers who continue to make payments, the full amount of their payment will be applied to the principal amount of their loans once all interest accrued prior to March 13 is paid.

    As long as you are financially healthy and have an emergency savings fund, continuing payments could help you pay off your student loans faster and save interest in the long run.

  5. If you’re seeking Public Service Loan Forgiveness (PSLF), this nine-month break counts toward your qualifying payments.

    This is excellent news for any medical professional who is confident they are on-track to receive PSLF. Your monthly payment will be essentially $0 dollars during this timeframe, so if you work for a qualifying employer and have been following all other program requirements, you should probably take advantage of this stimulus benefit and stay on your current course towards PSLF.

Final Thoughts

Even though it is a stressful time and you have lots of information coming your way, take some time to determine whether your existing student loans are eligible. To take advantage of the payment suspension on qualifying federal student loans, contact your student loan servicer or check your account online. Your servicer may automatically change your qualifying federal student loan payment to $0 per month. It’s important to consider your own unique repayment goals before determining how to best take advantage of this economic relief package’s student loan benefits.

Commerce Bank offers a complimentary student loan consultation to any individual with private or federal student loans. Email us, or call us at 800-666-3910, for help planning your repayment strategy.