When your obligation to make payments on your student loans is suspended, should you continue to make payments on your student loans if you are able?

The CARES Act provides a payment pause and interest waiver on federal student loans that are held by the U.S. Department of Education through September 30, 2020. Some borrowers still have jobs and are able to continue making payments on their federal student loans. Should they?

If a borrower makes payments on their federal student loans during the payment pause and interest waiver, the entire payment will be applied to the principal balance of the loan after any unpaid interest that accrued prior to March 13, 2020 is repaid.

You shouldn’t do this if you expect to qualify for loan forgiveness, since making extra payments will just reduce the amount of loan forgiveness.

If you are going to make payments when not required to do so, first build an emergency fund containing half a year’s salary. You might still have a job now, but with millions of people losing their jobs every week, who knows what might happen in a month or two.

Once you’ve built an emergency fund, use the extra money in your budget to accelerate repayment of the debt with the highest interest rate. That might not be your federal student loans, but rather private student loans or even non-education debt like credit card debt.