If you have student loans and are worried about making the payments, you can relax – if your loans meet certain conditions.
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed by Congress and signed into law by President Trump on March 27, 2020, suspends payments and prevents interest from accruing on federal student loans held by the U.S. Department of Education for six months, until September 30, 2020. The payment suspension is automatic, so you don’t have to request it.
Collection actions and wage garnishments are also suspended, and negative credit reporting during the crisis is prohibited. Your loans aren’t forgiven; you still must repay them.
Even though payments are suspended, those six months still qualify as payments toward loan forgiveness, including in the Public Service Loan Forgiveness program. If you choose to continue to make payments during this time, the entire amount will go toward the principal, with none of it eaten up by interest.
People still struggling financially when the six-month period is over should contact the U.S. Department of Education for more information about other options, including forbearance and deferment.
If you opted for private student loans or chose to refinance your government student loans with a private lender, this provision of the CARES Act does not apply to you. Other options may be available, so contact your lender.
- Related Links:
- How to Manage Your Federal Student Loans During the Coronavirus Outbreak
- What you need to know about student loans and the coronavirus pandemic
- Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for Student Loan Borrowers, Will Refund More Than $1.8 Billion to Students, Families
- Senators Seek Help For Student Loan Borrowers Left Out Of Coronavirus Relief Bill
- COVID-19 Student Loan Support Center