Federal Student Loan Interest Rates Set to 0% AND Option to Suspend Payments
On March 20, 2020, U.S. Secretary of Education Betsy DeVos announced that the office of Federal Student Aid will be providing student loan relief to millions of borrowers during the Coronavirus pandemic.
Here are the key takeaways from this announcement:
- All borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. In addition, each borrower will have the option to suspend their payments for at least two months allowing borrowers to temporarily stop their payments without worrying about accruing interest.
- All federal student loan servicers will 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, 2020. To request this forbearance, borrowers should contact their loan servicer online or by phone.
- Any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent will be automatically be placed in an administrative forbearance resulting in an automatic suspension of payments, essentially giving borrowers a safety net during the national emergency.
- If borrowers want to continue making payments, the full amount of their payment will be applied to the principal amount of their loan once all interest accrued prior to the president’s March 13th announcement is paid.
- Any borrower who has experienced a change in income can contact their loan servicer to discuss lowering their monthly payment.
- Note that private student loans are not eligible for these benefits.
- Click here for more information and updates.