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Does my student loan qualify for coronavirus relief?

By on March 9, 2021 0

Dear Liz: I do not understand what help is available to people with student loans. At first I heard that interest was waived, but payments had to be made. Then, supposedly, the stimulus package made the payments optional. Is there something I need to do to get relief or is it automatic?

Reply: If your student loans are federally owned, the relief should be automatic. You will not have to make any payment until September 30, and interest will be waived during this time. In addition, federal collection efforts on delinquent student loans have been suspended.

These provisions of the Coronavirus Aid, Relief and Economic Security Act apply to federal student loans made under the Direct Loan Program, including undergraduate loans, graduate loans, and parent loans. You can connect to Studentaid.gov to see if your loan qualifies.

If you have Perkins loans or federal family education loans that do not qualify, you can consolidate those loans into a direct consolidation loan, which would qualify. The provisions also do not apply to private student loans, although your lender may offer other options in case of difficulty.

Donate your relief funds

Dear Liz: My wife and I are retired. We are financially well off, with a generous pension, maximum social security benefits due to start in a few months, and three years of cash in the bank. We do not plan to touch our investments until the mandatory distributions of our IRAs begin. Now we’re apparently going to get $ 2,400 tax-free as part of the coronavirus stimulus package. We don’t need money, and we don’t particularly want it. We would love to receive your thoughts on how we can give it to generate the greater good, at the individual and societal levels. Where is the most important “multiplier” effect?

Reply: Thank you for thinking of others. Donating money to a food bank is always a good choice. These charities often have agreements with food suppliers that allow them to create many more meals using the donated money than they could produce with the donated food. Cash also allows food banks to provide perishable food. In some cases, food banks work directly with farmers to provide fruits and vegetables that are too imperfect to sell, reducing food waste.

One option is to give in Feed America, which represents a network of 200 food banks nationwide that feed more than 40 million people. Meals on wheels is another option that helps 5,000 community programs.

There are of course many other ways to help those hard hit by the coronavirus pandemic. Before you donate to a charity, consult with one of the watchdog organizations such as Charity browser Where CharityWatch. You’ll want to make sure that the bulk of your money is supporting the cause, rather than fundraising efforts or overhead costs.

You can also use checks to directly help people or businesses in need. Buying gift cards at local restaurants and small businesses offers a potential two-for-one benefit: you can give the cards to people who need help while you help keep businesses afloat. Or you can subscribe to newspapers and public radio stations that work hard to provide you with accurate and timely information on how to stay safe during the pandemic.

Volatile Markets and Retirement

Dear Liz: With the turmoil of the stock market, I thought about a strategy that can be safe but not safe. I have about $ 315,000 in a trust account that earns me about $ 9,000 a year in dividends. I am 81 years old. If I sell all of the shares in my trust account, I could withdraw the same $ 9,000 for over 10 years, not counting about 2% growth on the $ 315,000. What are your thoughts?

Reply: Many people have found that they don’t tolerate risk as much as they think they do. The volatility of the stock market has pissed off even seasoned retired investors. Most, however, should keep investing because they won’t need the money for decades, and even retirees generally need the kinds of returns that only stocks can deliver over the long term.

However, there is no reason to take more risks than necessary. If all you need from your trust account is $ 9,000 a year, you are unlikely to run out, even if your money is in cash. But you might need more than $ 9,000 in the future – to adjust for inflation, for example, or to cover the costs of long-term care.

One option to consider is a single premium immediate annuity. In exchange for a lump sum, you would get a guaranteed flow of monthly checks for the rest of your life. At your age, you could get $ 9,000 a year by investing about $ 100,000 in such an annuity. Because your payments would be secured by the annuity, you might be more comfortable leaving at least some of the rest of your account in stocks for potential growth.

Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions can be directed to him at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.

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