Coronavirus: Your Federal Student Loan Payments Have Been Suspended For 6 Months
Most student loan borrowers will get a six-month reprieve from making payments to the federal government as the coronavirus pandemic triggers widespread unemployment and economic hardship.
Through Sept. 30, 2020, your federal student loan payments are suspended and you don’t need to do anything. Payments will be automatically suspended with no late fees, Forbes reported.
During the six months, no interest will accrue so borrowers will not see their balances grow as the result of the six-month loan forgiveness.
The $2.2 trillion Congressional stimulus bill signed into law on March 27 suspends wage garnishment and reduced tax refunds for qualifying student loan borrowers who are in default.
However, the CARES Act only applies to federal student loans, not private student loans.
Listen to GHOGH with Jamarlin Martin | Episode 70: Jamarlin Martin Jamarlin goes solo to discuss the COVID-19 crisis. He talks about the failed leadership of Trump, Andrew Cuomo, CDC Director Robert Redfield, Surgeon General Jerome Adams, and New York Mayor de Blasio.
Students owe $1.64 trillion in student debt in the U.S. — more than double the $675 billion that was due in June 2009 following the Great Recession. One of the problems is the high-interest rates these loans were borrowed at, Bloomberg reported.
The vast majority of student loans are federal loans. Private loans made up about 12 percent of all education loans in 2018–2019, according to the College Board.
This temporary loan forgiveness will not affect credit scores or a person’s qualification for loan forgiveness on federal loans, BuzzFeed News reported. According to the bill’s text, “each month for which a loan payment was suspended” will be treated as if “the borrower of the loan had made a payment.”