Should you continue to pay your student loans during the pandemic?
Updated on May 7, 2020
You don’t have to make payments on student loan debt right now. That’s because they’re automatically in forbearance due to the coronavirus pandemic. However, the question of whether or not you should make the payments is a little bit more complicated, and it depends on your finances and the amount of debt you have.
If you’re earning a significant amount of money, continue paying your student loans
If you have a job that pays a fairly comfortable salary, it’s best to continue to pay your student debt. This will help you to get ahead before the forbearance period is over. However, if you are unsure whether or not you can comfortably afford to make payments on your student loan, it may be better to put the money in an emergency savings account instead.
If you’ve lost your job or your pay has decreased, don’t pay during the forbearance period
If your earnings have decreased as a result of the pandemic, it’s extremely important that you put money aside for the future. No one knows how long this crisis will last, and it’s impossible to tell what the future will bring.
The payment plan that you have is another important factor to consider
If you have chosen an income-driven or income-based repayment plan, making payments on your student loan debt during the forbearance period won’t necessarily help you get ahead. Due to the fact that your student loan debt will be wiped after 20 or 25 years under these plans, making payments now won’t necessarily help you to get ahead. If you expect that there will still be an outstanding balance on your student loans after the end of the payment schedule, it’s best to put your money into a savings account during the forbearance period.
If you’ve made payments during the forbearance period, you can get your money back
If you have already made payments on your student loans and have a limited income, it’s probably best to get a refund on payments that you’ve already made. It’s important to put any money that you get back into a savings account, if possible.