Student Loans

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The CARES Act (H.R. 748), passed by Congress on March 27, includes support for students and student borrowers who have been adversely affected by the COVID-19 pandemic. This includes $30 billion in emergency education funding and a series of actions to reduce the burden of student loans during this crisis. 

The CARES Act suspends federal student loan payments, the accrual of interest on these loans, and involuntary collection of payments – including garnishment from wages, tax refunds, or Social Security or other federal benefits – through September 30, 2020. Most federal loans are included in this provision; however, private student loans and some Federal Family Education Loans and Perkins Loans are not included. 

Additionally, each month of the temporary suspension will count as if a payment has been made for a borrower in a loan forgiveness or rehabilitation program, including those under the Public Service Loan Forgiveness Program. Even though you aren’t making any payments, the CARES Act requires the federal government and credit reporting agencies to count these months as though you are. If your employer pays your student loan obligations, they can do so tax-free up to January 1, 2021 for up to $5,250.

Please be advised that you can choose to pay your federal student loans during the temporary suspension; however, your monthly payment will not change. Each student loan payment will pay off any previously accrued interest first and then will reduce your principal balance, helping you pay off your loans faster.

While these provisions do not amount to complete forgiveness, they provide student borrowers with needed relief from their obligations now. 

For more information on the efforts the Department of Education is taking to address the COVID-19 national emergency, visit COVID-19 Information and Resources for Schools and School Personnel. For the federal student aid FAQs pages on coronavirus, visit Coronavirus and Forbearance Info for Students, Borrowers and Parents and Guidance for interruptions of study related to Coronavirus (COVID-19).

FAQs:

Education - CARES Act FAQs

Families First COVID-19 Resources Toolkit