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CARES Act and private student loans

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  • CARES Act and private student loans

    Anybody think private student loan companies will eventually give 0% interest or suspend payments? Feeling pretty bitter that I just refinanced my wife's student loans a couple of months ago.

  • #2
    I'd doubt it. I'd speculate some would allow some sort of hardship forbearance, but that interest would likely accrue.

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    • #3
      I've asked for an economic hardship forbearance on my private student loan (MOHELA). Apparently the servicers have been sensitive to the COVID situation and may grant one. They were sure to point out that interest will still accrue if forbearance is granted and will capitalize at the end of the forbearance period. (unless you pay the interest, which is an option).

      I likely won't be getting a paycheck for ~3 months, so I'm just trying to not have to drain my cash savings during that period. I'd rather pay an additional $1k in interest and still have that cash left over to keep putting towards house downpayment or another car if my old car dies.

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      • #4
        I got disaster forbearance for Earnest, for 3 months. However, I got it mainly as a last resort. Don't plan to use it--As Bonez mentioned, interest still accrues. Unsuspecting, early career docs with high principal amounts may think they are getting a good deal. Honestly, unless you have ZERO cashflow, the disaster forbearance is a crap deal. At best, these companies are actually trying to take advantage of the situation, providing "forbearance" out of a false premise of altruism, when in fact they stand to make decently more money on the accrued and subsequently capitalized interest. Disgusting!

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        • #5
          Originally posted by GastroMastro View Post
          I got disaster forbearance for Earnest, for 3 months. However, I got it mainly as a last resort. Don't plan to use it--As Bonez mentioned, interest still accrues. Honestly, unless you have ZERO cashflow, it's a crap deal. At best, these companies are actually trying to take advantage of the situation, providing "forbearance" out of a false premise of altruism, when in fact they stand to make decently more money on the accured and subsequently capitalized interest. Disgusting!
          I mean, would you rather they just say "pay up"? I don't see why they should have to eat the cost, seems like a couple months forbearance is more than fair

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          • #6
            Originally posted by 8arclay View Post

            I mean, would you rather they just say "pay up"? I don't see why they should have to eat the cost, seems like a couple months forbearance is more than fair
            Yeah, you're right. Completely. I have no counterargument

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