Key Impacts of CARES Act Expiration The CARES Act was a necessary and positive action to help students and families through this unprecedented time. When student loan repayment suspension ends, it will set up an unusual set of challenges for students and the Financial Aid Office. This article outlines eight overlying potential challenges as they relate to students and financial aid offices. As a reminder, FFEL Loans and private loans held by lenders are not included in these changes. 1.  All delinquent borrowers, as of March 2020, were brought current and will be kept current until the suspension expires. Everyone not making payments before the suspension were brought current without having to do anything. Some of these borrowers may have been on the verge of default and may not even know their loans are now current. When the suspension expired, all borrowers entered repayment at roughly the same time. For those that were on the edge of default, it will have been more than three years since they have done anything on their student loans. 2.  Some borrowers were in a suspended status such as a deferment or forbearance. These borrowers started that suspension before March 2020, and should have come out of that status before the end of the suspension. Since the servicers are ensuring that no borrower goes beyond 31 days delinquent, these borrowers may forget they had payments coming due. With the provisions of the CARES Act, these borrowers likely weren’t engaged until the suspension expired and still may not be aware. 3.  Diligent Repayers Tripped Up by Timing: Many borrowers were enrolled in Income Driven Repayment Plans. If the plan would have been due for renewal between March 2020 and June 2023, the CARES Act allowed servicers to continue to use the plan. The plan was not really being used because everyone has a zero payment amount. However, beginning in July 2023, many borrowers needed to recertify their Income Driven repayment plans. This is at the same time many new borrowers are trying to enroll causing delays due to volume. Due to job changes, there may be others that were able to pay prior to the pause, that are not able to make payments now. They will also need additional assistance. 4.  Based on previous experience with natural disasters, it is predicted that when repayment resumes, there will be an influx of delinquent borrowers. These borrowers will be more challenging to resolve because all borrowers who could not, or chose not to, make payments, will reenter repayment at the same time. Restarting all at once will likely result in a large number of borrowers becoming 60 days delinquent at the same time creating a larger number of borrowers requiring repayment guidance at once. 5.  Many borrowers are in between their repayment right now, but in the traditional sense, the suspension also impacts students who were in their grace period. Some students that left school or dropped below half-time since March of 2020 have gone through Grace, but they have not had to make payments and prepare a budget as they would have before the pandemic. They don’t have the experience of students who left school and entered repayment before the pandemic. Think about a student who left school in October 2019. They would have been in Grace November through April and entered repayment in May. They have not had to do anything since October of 2019. That will be more than 3 years without action on their part. Students that dropped below half-time after April 2023, didn’t have an extension in their grace period and may be confused as to when they start paying. Without guidance, these students may not even know where to start.


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