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How to handle student loan repayment during the pandemic

Posted at 5:32 AM, Sep 16, 2020
and last updated 2020-09-16 07:34:20-04

GREEN BAY, Wis. (NBC 26) -- The pandemic has changed the way we handle our finances. This includes repaying our student loans.

Due to the CARES Act, all interest and payments have been suspended through the end of the year on federal student loans.

A financial expert from UW-Green Bay said there are two ways you can handle this scenario.

You can continue paying your monthly payment. This way all of the money will go straight to principal so you'll pay the loans off faster.

The other option is to skip payments through the end of the year to free up some cash to handle your household needs.

"Ready cash is important right now," said Preston Cherry, an assistant professor of personal financial planning at UW-Green Bay. "There is still uncertainty and there will be through the end of the year and probably through 2021. To build up cash, emergency cash or cash readiness is important."

Experts say the best way to go is to use your money to pay off higher interest credit card debt.

Another thing to keep in mind is the suspension of payments and interest is only applicable to federal loans.

If you have private loans that doesn't apply so you'll have to call your bank or servicer to negotiate those rates with your private loan provider.

If you're looking for additional information on managing your student loans you can head to the FASFA website.