While many new college graduates struggle to find work, federal student loan borrowers have a bit of a break: Right now, they’re on an automatic, interest-free payment break until January. The CARES law, passed in March, reduced interest rates to zero and stopped collection of overdue loans. A new study estimates that about 89% of borrowers in the United States are currently taking advantage of the program. This means that there are no bills for about 764,000 borrowers in Massachusetts and about 1.7 million in New England. Financial aid expert Mark Kantrowitz says there is a chance this aid package could be extended until September 2021. Private loan borrowers haven’t had the same break. But all borrowers have options to make payments more manageable, regardless of their employment status or the type of debt they carry. Until more employers start hiring again, recent graduates have a few options to alleviate their debt. The federal payment hiatus gives them time to breathe since loan bills will not be due until January, barring a possible extension. To manage payments when they restart, unemployed people can choose an income-based repayment plan or deferral of unemployment. An income-based repayment plan is your best option in the long run. It caps payments at a portion of your income – 10% for example – and extends the repayment term. If you are unemployed or underemployed, your payment could be zero. You must contact your student loan manager to register. If you need short-term relief, deferral of unemployment allows you to defer repayment for up to 36 months in six-month increments. This is less desirable than income-based repayment because interest accumulates and is added to the total debt when the repayment begins. To qualify for deferral of unemployment, you will need to apply to your service agent and prove that you are receiving unemployment benefits or, in the case of recent graduates, are looking for full-time work. If you’re considering changing your loan payments, do so as soon as possible to keep payments manageable, says Scott Buchanan, executive director of the Student Loan Servicing Alliance, a nonprofit trade association representing student loan managers. Even if you haven’t started paying yet, you can talk to your manager about getting started on an income-driven repayment plan when payments start in January, Buchanan says. Private student loan borrowers have fewer options to modify or suspend payments compared to federal student loan borrowers. You should contact your lender to find out if you qualify for a temporary reduction in the payment amount or to request a forbearance. Many private lenders offer disaster or emergency forbearance for up to 90 days in addition to existing options. Unlike the current automatic pause on federal loans, any private loan forbearance always accumulates interest. Information from the Associated Press was used in this report.

While many new college graduates struggle to find work, federal student loan borrowers have a bit of a break: Right now, they’re on an automatic, interest-free payment break until January.

The CARES law, passed in March, reduced interest rates to zero and stopped collection of overdue loans.

A new study estimates that about 89% of borrowers in the United States are currently taking advantage of the program. That means no bills for about 764,000 borrowers in Massachusetts and about 1.7 million in New England.

Financial aid expert Mark Kantrowitz says there is a chance that this aid program will be extended until September 2021.

Private borrowers have not had the same luck. But all borrowers have the option of making their payments more manageable, regardless of their employment status or the type of debt they carry.

Until more employers start hiring again, recent graduates have some options to alleviate their debt load.

The federal payment hiatus gives them time to breathe since loan bills won’t be due until January, unless they are extended. To manage payments when they restart, unemployed people can choose an income-based repayment plan or unemployment deferral.

An income-based repayment plan is your best option in the long run. It caps payments at a portion of your income – 10% for example – and extends the repayment term. If you are unemployed or underemployed, your payment could be zero. You must contact your student loan department to register.

If you need short-term relief, deferral of unemployment allows you to defer repayment for up to 36 months in six-month increments. This is less desirable than income-based repayment because interest accumulates and is added to the total debt when the repayment begins. To benefit from deferral of unemployment, you will need to apply to your service agent and prove that you are receiving unemployment benefits or, in the case of young graduates, are looking for full-time work.

If you plan to change your loan payments, do so as soon as possible to keep payments manageable, says Scott Buchanan, executive director of the Student Loan Servicing Alliance, a nonprofit trade association representing student loan managers.

Even if you haven’t started payments yet, you can talk to your service agent about getting started on an income-based repayment plan when payments start in January, Buchanan says.

Private student loan borrowers have fewer options to modify or suspend payments compared to federal student loan borrowers. You should contact your lender to find out if you qualify for a temporary reduction in the payment amount or to request a forbearance.

Many private lenders offer disaster or emergency forbearance of up to 90 days in addition to all existing options. Unlike the current automatic pause on federal loans, any private loan forbearance always accumulates interest.

Information from the Associated Press was used in this report.