If you have Federal Student Loans the Secretary of Education has announced some things that may help you as a result of the Coronavirus. Note that none of this applies to people who have private student loans.
Here is what I can find from reviewing the press release:
- 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 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.
- 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. This means your payment is now lowered it just all goes to principal.
- Contact your loan servicer online or by phone to determine if your loans are eligible. Your servicer is the entity to which you make your monthly payment. It can’t hurt to ask!
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