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Federal Student Loan Relief During Coronavirus

A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides automatic suspension of principal and interest payments on federally-held student loans through September 30, 2020. These suspended payments will count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.

Again, your payment obligation will automatically stop from March 13 through September 30. This includes borrowers who are on automatic payment plans. You do not need to apply to suspend my payments or interest. From March 13 through September 30, 2020, the interest rate is set to 0% and payments are suspended for student loans owned by the federal government. Your federal student loan servicer will suspend all interest and payments without any action from you.

However, you may want to contact your loan provider to discuss the following:

  • Determine if your loan is held by the federal government, because your loan payments will automatically be postponed with no interest until September 30, 2020.
  • If you are already enrolled in an income-driven repayment plan but are experiencing a change in income, you might want to ask your servicer to recalculate your monthly payment right now.
  • If you made a payment toward your federally-held student loans after March 13, you can request a refund from your student loan servicer. However, if you are financially able to make payments or continue making payments on your student loans, any payments you made or make after March 13 will be applied directly to the principal. This will help you pay off your loans faster.

The suspension of payments applies only to student loans that are held by the federal government, which are the vast majority of student loans issued since 2010. Servicers are required to send you a written notification explaining the suspension of interest and monthly payments between March 13 and September 30, 2020. These notices are expected to be sent by mid-April. Make sure your servicer has up-to-date contact information and check your mail or email.

Additionally, the Department of Education has stopped the collection of defaulted federal student loans, including garnishment of wages and the offset of tax refunds and Social Security benefits. If you are rehabilitating a defaulted student loan, any missed payments due to coronavirus pandemic will not be considered a missed payment against your rehabilitation.

The Federal Student Aid website has set up a coronavirus information page to keep borrowers updated, so if you're a federal student loan borrower, it's a good idea to check it frequently for the most up-to-date information.

For other kinds of student loans (such as a federal student loan held by a commercial lender or the institution you attend, or a private student loan held by a bank, credit union, school, or other private entity) contact your student loan servicer to find out more about your options. Many private student loan lenders are offering extended forbearance options and other benefits.

If you are still required to make a payment that you can’t afford and you only need a temporary pause on payments, investigate whether deferment or forbearance is an option for you. Servicers have been authorized to grant a 90-day forbearance to borrowers who are experiencing financial difficulties due to the pandemic. Putting your loans into a deferment or forbearance will not result in negative credit reporting.


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