Three things educators need to know about their student loans and the CARES Act

You may know that if you have federal student loan debt, you’ve been granted forbearance through Aug. 31, 2022, as part of the CARES Act. This means no student loan payments, no interest accrued and no wage garnishments.

There are three important things educators need to know about student loan debt during the CARES Act forbearance.

1. Mainstream advice is often not ideal for teachers and other public school employees. Sources like Yahoo Finance, U.S. News and the Motley Fool recommend you keep paying your student loans during forbearance if you can. While this is sound advice for many, it may not be the best strategy for educators. Here’s why: Under the Public Service Loan Forgiveness (PSLF) program, once you make 120 qualifying payments (about 10 years in public education), you can apply for PSLF to have all remaining federal student loan debt, including accrued interest, forgiven. During forbearance, your $0 “payments” count as a qualifying payment. That means, if you’re on track for PSLF, and you make $0 “payments” during forbearance, you’ll receive greater forgiveness in the end.
2. Your $0 payments count toward loan forgiveness ONLY if you leverage the PSLF program, and not all repayment plans qualify for PSLF. Do you know which payment plan you’re on? You may have an extended or graduated repayment plan, and these do NOT qualify for PSLF, meaning you could be missing out on a forgiveness opportunity. To qualify for PSLF, you need to be on an income-driven repayment plan, and the best one depends on your unique situation.
3. When forbearance expires August 31, loan servicers and the federal government may be overloaded with requests. Start your application for an income-driven repayment plan, and get ahead of the potential backlog.

The most important takeaway for educators with student loan debt is to get your loans in order now! Doing so is not always an easy process, and that’s why we’re currently offering complimentary access to our Student Loan Solutions accounts. Sign up for our free service today, and you’ll receive access to online tools and loan coaches to help you manage your student loan debt and apply for federal loan forgiveness.

The information provided here is for general informational purposes only and should not be considered a recommendation. Horace Mann’s Student Loan Solutions program includes services provided by a third party, Tuition.io. Horace Mann is an independent company not affiliated with the Department of Education or the federal government. Horace Mann does not negotiate, adjust or settle debts. No assistance provided by Horace Mann constitutes official action for purposes of student loan forgiveness programs or guaranteed results. Horace Mann’s Student Loan Solutions program terms are subject to change. This information reflects a summary of our current understanding of certain provisions in the CARES Act. There are other significant changes in the CARES Act that may impact your long-term financial planning. As with any new law, the CARES Act’s meaning is subject to further clarification and change, as many questions are yet to be answered. You should consult with your tax, legal and financial advisors regarding your specific situation.