Update on Coronavirus Relief for Student Loan Borrowers | Student Loan Ranger

0

At the request of President Joe Biden, incumbent Secretary of Education Phil Rosenfelt has extended federal coronavirus relief to borrowers Student Loans until September 30, 2021.

RELATED CONTENT

The original Coronavirus Relief Act, known as the CARES Act, which was incorporated into law on March 27, 2020, helped most federal student loan borrowers by blocking payments and involuntary collections on government-held student loans through May 30, 2020. September 2020 temporarily interrupted. So in August, President Donald Trump signed a memorandum extending the break until December 31st. At the beginning of December, then Education Minister Betsy DeVos announced that the break would be extended again until January 31, 2021.

As a result, borrowers on student loans held by the federal government were not required to make payments on those loans for most of 2020, nor were they incurred any interest under Administrative Forbearance. In addition, debt collection activities such as garnishment of wages and reducing tax refunds were banned in order to provide relief to student loan borrowers struggling during the COVID-19 pandemic.

The latest addition is good news for borrowers who have relied on this relief to make ends meet. Here’s what you need to know.

Temporary breaks are still automatic

For qualified borrowers, the extension will automatically continue the break for student loan payments and involuntary federal collections through the end of September. The 0% temporary interest rate on all federal student loans is also retained.

Specifically, collections on defaulted federal government-held loans will be stopped, and any borrower with such loans who have done so Wages garnished During this time, you will receive a refund for these garnishments. All qualified federal student loan payments made since March 13, 2020, the retroactive date of the administrative grace period, can also be refunded upon request.

Borrowers are not required to take action to renew their emergency leniency or cease debt collection activities, and these benefits continue to apply to all qualified borrowers.

Months still count for lending and rehabilitation programs

Another important aspect concerns those seeking eventual forgiveness or rehabilitation of the student loan.

Months during the break will continue to count towards the 120 payments required under the Public Loan Program – if the borrower is working full-time for a skilled employer during the suspension period – and also towards payments required to make forgiveness under the Framework of a program Income-based repayment plan.

Likewise, months during the extended suspension will continue to count towards federal loan recovery programs for borrowers student Defaulted Loans. If during this break time – at any time since March 13, 2020 – you have a defaulted federal student loan and enter into a new rehabilitation agreement, the suspended payments that would have been made from the start of your agreement through September 30, 2021 will count.

Borrowers on ineligible federal student loans will still have access to emergency assistance

Education previously also expanded the flexibility for student loan service providers to help borrowers who do not qualify for the automatic discharge. This allows servicers to provide additional indulgence to borrowers who have yet to make payments on their federal student loans but are having difficulty doing so.

Like the CARES Act, the extension excludes borrowers on non-government Perkins loans and commercial Federal Family Education Loans (FFEL). These two programs no longer exist, but there are still many borrowers repaying student loans received through them.

While these borrowers may not have received the automatic temporary benefits, they can still seek relief by applying for emergency leniency or applying for an earnings-based repayment plan.

If you are unsure of the types of student loans you have, contact your loan service provider to find out. If you have an online account with your credit service provider, you can also check there that the benefit has been applied to your account. If you find that your student loan has been excluded from temporary benefits, you can still do so Contact your credit servicer for relief Apply for Income-Based Repayment or Forbearance.

More updates will follow

The education department and their student loan service providers work together to provide qualified borrowers with the necessary information about updates to coronavirus relief. The education department publishes details about theirs FAQ page to help borrowers understand how this extension will affect their loans.

There are still a few details that need to be finalized and passed on to federal borrowers. So stay tuned for updates from your loan service provider. For example, Education had previously confirmed that borrowers in an income-based repayment plan would not have to recertify their income before January 31, and that those borrowers would be notified of a new recertification date one at a time before it was time to recertify. The Biden government has not yet addressed how the recent widening of borrower relief could affect this.

To make sure you get the latest updates, make sure that the address and contact information on file with your student loan service provider are up to date. You can call your servicer or log into the payment gateway to verify.

Share.

Leave A Reply