Here’s what you need to know to get student loan relief during the coronavirus crisis. On March 27, President Donald Trump signed into law the Coronavirus Aid Relief and Economic Security act, a $2 trillion economic stimulus package.
All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. That has
In addition, each of these borrowers will have their payments suspended until Sept. 30. to allow them greater flexibility during the national emergency.
This will allow borrowers to temporarily stop their payments without worrying about accruing interest.
“These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted,” said Secretary DeVos.
That means you will not have to make a loan payment until October without penalties or fees.
What Student Loans Qualify for Financial Help?
Federal student loans that qualify for relief are:
- Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
- Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.
- Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.
- Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
How to Get Student Loan Relief
All federal student loan servicers have been ordered to grant an administrative forbearance to any borrower with a federally held loan who requests one.
The forbearance will be in effect for a period of at least 60 days, beginning on March 13.
To request this forbearance, borrowers should contact their loan servicer online or by phone.
All borrowers will get an automatic suspension of payments if their loans are more than 31 days delinquent as of March 13.
If your loan account becomes 31 days delinquent, you can also get the forbearance.
Some borrowers may want to continue making payments, like those seeking Public Service Loan Forgiveness (PSLF) or those enrolled in a repayment plan with a manageable monthly payment.
Any borrower who has experienced a change in income can get student loan relief by talking with their loan servicer.
Federal Student Loan Servicer Contacts
|FedLoan Servicing (PHEAA)||1-800-699-2908|
|Granite State – GSMR||1-888-556-0022|
|Great Lakes Educational Loan Services, Inc.||1-800-236-4300|
Student Loan Relief Coronavirus FAQ
Which loans are covered by the announcement?
All loans owned by the U.S. Department of Education (ED) will have interest waived. That includes Direct Loans, as well as Federal Perkins Loans and Federal Family Education Loan (FFEL) Program loans held by ED.
Please note that some FFEL Program loans are owned by commercial lenders, and some Perkins Loans are held by the institution you attended. These loans are not eligible for this benefit at this time.
If my loans are owned by the U.S. Department of Education, do I need to do anything for the interest on my loans to be waived?
No, ED will automatically adjust your account for student loan relief so that interest doesn’t accrue. The account adjustment will be effective March 13, 2020. During this period of no interest, if you continue to make payments, the full amount will be applied to principal.
However, if your loan had already accrued interest prior to President Trump’s March 13 announcement, your payments will first be used to pay off that outstanding interest.
Will my monthly payment go down during this student loan relief period?
No. Your monthly payment will remain the same, but the full amount of the payment will be applied to already accrued interest and/or outstanding principal.
This means that you are likely to pay your balance down more quickly during this zero-interest period.
If I make loan payments after March 13, how will they be applied?
During the period of no interest, the full amount of your payments will be applied to principal once all the interest that accrued prior to President Trump’s March 13 announcement is paid.
As you will see below, you can suspend your payments for at least 60 days without additional interest accruing.
How long will interest be waived during this student loan relief period?
Interest will not accrue on federally held student loans for at least 60 days, beginning on March 13, 2020. ED may extend that period, depending on the status of the COVID-19 national emergency.
What do I need to do to suspend my payments?
You can ask for an administrative forbearance. Being in an administrative forbearance means that you can temporarily stop making your federal student loan payments without becoming delinquent.
Because interest is being waived during the COVID-19 national emergency, interest will not accrue (accumulate) while you are in forbearance. If you request an administrative forbearance, you will not have any payments due for as long as the administrative forbearance lasts.
Your loan servicer will cancel any scheduled auto-debit payments. After the administrative forbearance ends, you will have to resume making payments.
What if I am already more than 31 days past due on my payments?
If you’re at least 31 days behind on your payments as of March 13, 2020, or become more than 31 days delinquent after that date, you’ll automatically be placed in an administrative forbearance to give you a safety net during the COVID-19 national emergency.
If I want an administrative forbearance, do I have to request it?
If you want to request an administrative forbearance, you should request one by contacting your loan servicer.
If you do not know who your servicer is or how to contact them, visit StudentAid.gov/login or call us at 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf or hearing-impaired 1-800-730-8913) for assistance.
Are private student loans eligible for this benefit?
No. ED does not have legal authority over private student loans, so they are not covered by the president’s forbearance announcement.
How long will the administrative forbearance last?
The administrative forbearance will last for at least 60 days from March 13, 2020. ED may extend that period, depending on the status of the COVID-19 national emergency.
If the option for an administrative forbearance is extended, your loan servicer will communicate information about the extension to you.
Is there any reason why I would not want to suspend my payments?
If you are pursuing Public Service Loan Forgiveness or Income-Driven Repayment (IDR) forgiveness, you may not want to go into an administrative forbearance because the time spent in an administrative forbearance does not count toward the required payments.
However, if your income has changed, you may qualify for a lower monthly payment in an IDR plan — a payment that could be as low as zero dollars.
A zero-dollar IDR payment counts toward the required 120 payments. If you are on an IDR plan and your income has changed significantly, you can update your information and get a new payment amount.
To do so, visit StudentAid.gov/idr, click on “Apply Now,” and then start the application by clicking on the button next to “Recalculate my monthly payment.”
If you can afford to make your loan payments during the COVID-19 national emergency, you may want to continue to do so to pay off as much of your loan as possible while there is a 0% interest rate.
What if my loan is already in forbearance?
If your loan is already in forbearance, it will stop accruing interest starting on March 13, 2020, for at least 60 days.
However, when your loan goes back into repayment, any interest that accrued during the forbearance period prior to March 13, 2020, will capitalize, which means that any outstanding interest will be added to your principal balance.
As long as you are in forbearance, you will not be penalized for making a payment that is less than your usual monthly payment.
Meanwhile, you still have the option to make a payment on your loan to make progress toward reducing your balance.
My company has closed because of coronavirus/COVID-19. Can I stop making payments until I’m working again?
If you’re having trouble making payments, contact your loan servicer as soon as possible. If you have a Federal Perkins Loan, contact your school. You can easily avoid the consequences of delinquency or default by staying in touch with your servicer or school.
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