Government Response to COVID-19
In response to the COVID-19 crisis, the government has enacted several changes related to federal student loans to provide struggling borrowers with some temporary relief. These policies do not apply to private student loans.
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. As part of the law, all payments on federal student loans have been suspended for six months through Sept. 30.
During this period, no interest can accrue, and nonpayment cannot be used to affect borrowers’ credit scores. Further, borrowers will still qualify for monthly payments toward loan forgiveness during this period. The payment reprieve is automatic and effective as of March 27.
Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF)
The six-month reprieve on federal student loan payments will not impact progress made under IDR or PSLF. If your income has been reduced as a result of coronavirus, you can submit a request for a recalculation of your payment on your IDR plan, to lower your payment for the next 12 months based on your reduced income.
On March 13, 2020, President Trump announced the Department of Education will waive all interest on federal student loans. This interest waiver will be effective starting March 13, 2020 and will be automatically applied.
- No action is required to take advantage of the interest-waiver program.
- This includes all Direct loans and Federal Family Education Loans (FFEL loans) that are owned by the Department of Education.
- This waiver applies to loans in any status (in school, grace, repayment, deferment, forbearance, default, etc.).
- The 0% interest rate will remain in effect until Sept. 30.
The CARES Act signed into law by President Trump on March 27, 2020 suspends collection actions and wage garnishments for six months through Sept 30. All tax refund offsets, Social Security offsets and administrative wage garnishments also are suspended during this time.
If you are experiencing additional financial stress at this time, we encourage you to review our COVID-19 financial resources.