The extension of the CARES Act emergency relief programs helped different sections of the societies in America. One of them includes students. The benefits were available till September 2021, but the changed rules allowed students to breathe a sigh of relief until January 2022. The grant was already a huge help for students as they did not need to worry about payment and interest rates for the education loan. They could pay attention to other necessary aspects of their lives, such as family, financial choices, and health. However, the extended benefits proved more motivating as they didn’t need to pay interest rates for some more time, and the saved amount helped them cover other bills.
William D King: Impact of the extension of the CARES Act for students
A chance to minimize the student loan debt
The ability to stay away from interest rates allowed students to make up for the principal balance. As a result, they have to pay lower charges due to the reduced credit when interest rates restore. It also helped them save. Experts believe that this presented a perfect opportunity for students to use their savings for short-term investments. What they earn from this could go into paying the remaining amount.
An opportunity to refinance student loan
Regardless of someone paying the federal loan amount under their student loan or continuing to enjoy financial relief, the thing is, private loans for students are available at astronomically low-interest rates. So, it has been one of the greatest opportunities to enjoy lower interests, lower monthly payments, etc. Due to this, savings also got a push by default. If you decide to take another student loan, you can use a private loan program without worrying about your federal student loan. According to experts like William D King, refinancing can be a better decision as you get favorable terms. You can opt for low monthly payments at higher interest rates or reduce your loan period by clearing the debt incurring less interest rate.
Some students doubt whether they should continue to enjoy the relief granted under the CARES Act or start clearing the debt. Well, COVID-19 has been harsh on almost everyone. Many families faced extreme financial struggles. So a freeze on a federal student loan is a significant relief for millions of them. If you wish to build your financial stability, you can use the benefits more. It will help you pay other bills, such as credit cards. Also, you will not have to face difficulty once the repayment process begins.
If you look at the studies or surveys, you will find what amount of emotional and mental pressure a person with debt has to deal with every time. The situation becomes worse for someone who has to shoulder family responsibilities says William D King. Since every individual tends to have different needs, it is acceptable to utilize this time to lower your debt expenses. To be precise, you can look at this window as a chance to save money so that you can pay high-interest rates when applicable while bringing down your debt.