 TITLE: Student Loan Borrowers Get Extended Relief Under New Provisions CONTENT: Should You Make Payments if You Can?\n------------------------------------\nBecause federal student loans first went into forbearance with a 0% interest rate, borrowers can make payments if they want. The payments are first applied to interest that has previously accrued or fees (from defaulted loans), and then pays down the loan's principal.\nIn a few cases, it may make sense to make payments.\nFor example, if your loans were in a grace period, deferment or forbearance before March 13, 2020, interest may have accrued before the CARES Act came into effect. As a result, the interest could be capitalized (in other words, added to your loan's principal balance) once payments resume. Your interest rate will then apply to your larger principal balance, which is why it may make sense to pay off at least the accrued interest now.\nAdditionally, if you can afford to make student loan payments, there could be a psychological benefit to paying down your balance—particularly if you're able to completely wipe out a few loans.\nIf your loans are in forbearance and aren't accruing interest, however, there isn't necessarily a financial benefit to paying down the debt.\nDepending on what other debts you hold, it may make more sense to forgo student loan payments and pay down other interest-accruing accounts instead. Or, set the money aside as extra emergency savings—you can make a large student loan payment later if you don't need it in the interim. Additionally, with the potential of student loan forgiveness on the horizon, it may make sense to hold off on making payments if your debt might be forgiven. END