What You Should Pay While Student Loans Are Paused

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Since March 2020, federal student loan payments have been paused, interest-free. In a nation as beset by student debt as this one, it's been a rare bit of relief — though it took a world-historic pandemic to get us here. The forbearance period is currently set to end in September, at which point, payments will come due again, right where they left off. You may be wondering if that makes the present a good time to pay down your principle.


Experts at the likes of NerdWallet and Lifehacker have a fairly definitive answer: no. At least, it may not be the best idea to keep on carving out a chunk of your income each month for federal student loans. Everyone's situation is different, of course, but overall, your money is most likely more useful doing other things than tackling your balance.

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Since all federal loan payments and accruing interest are on pause, this may be the time to focus on privately held debt. Even better, though, would be to put your money in a savings account with a high interest rate — or invest it, if you're feeling really brave. Letting that cash grow passively will give you more money to pay with come September. As ​Lifehacker​'s Jordan Calhoun writes, "People who can afford it will be better off making a student loan payment the day before interest restarts, instead of contributing the same amount via regularly monthly payments."


This may also be a good time to reach out to your elected federal representatives about the issue. If anyone has the power to extend or evaluate this repayment policy, it's them — through you.