Stimulus negotiations have collapsed now, and a deal looks like it will be weeks away, at best. The delays have left many questions, like those from student loan borrowers.

The CARES Act was passed in March. It suspended payments and interest on federal student loans through September 30, 2020. Without a stimulus deal to extend that, student loans are set to resume payments soon.

Luckily, borrowers caught a break when President Donald Trump signed an order that suspended such payments until the end of the year.

On August 8, the White House issued the said memo on student loan deferral. Payments are expected to restart by January 1, 2021.

"We also suspended student-loan payments for six months, and we're looking to do that additionally, and for additional periods of time." Trump said in a July 30 MarketWatch report.

The memo noted that many Americans have lost jobs or remain unemployed due to the COVID-19 pandemic. Some have also accepted lower wages and fewer working hours as states impose social distancing measures.

It is for these new work conditions that the policy on student loan payments has been extended.But there are still a few things student loan borrowers need to know. 

Borrowers of Private Student Loans

The presidential memo only applies to loans "held by the Department of Education." Anyone who wishes to continue paying for student loans will be allowed to do so, even though there is still a payment deferral. 

It is a relief for those under federal student loans. But not that great for some who hold private student loans such as through banks as this is not covered by the order, according to CNET.

Borrowers with Extra Cash

Borrowers who are not having a hard time financially despite the pandemic are reaping benefits from the extension.

If they take advantage of the deferral, they can have some extra cash to spend. According to Forbes, this could help the economy.

Student loan borrowers who spend the money they would've paid towards loans could provide a "marginal stimulus" for the economy through increased or sustained consumer spending.

As Trump also suspended the interest on federal student loans, those who make payments during this extension time will get to dodge the interest and pay their loans faster. This could save them money in the long run.

Borrowers in Income-Driven Repayment

Borrowers in income-driven repayment can also benefit from Trump's order. If they have extra money, they can make principal-only payments to let them pay down their loans faster.

Those under this kind of repayment plan have to make sure their income information is up to date.

When payments resume next year, they might be required to update their income because of the monthslong suspension. Failure to do so might default to a standard repayment plan, which could lead to higher spending. 

All Student Loan Borrowers

All borrowers have to track what Congress is doing to help them with their loans. 

Several proposals want an extension of the CARES Act payment deferral - some want it for until the end of the year while others want it for longer.

Other proposals are also seeking student loan forgiveness, but that seems unlikely to happen.

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