Do YOU have Student Loans?
If you answered yes, please read some important facts to know regarding your Student Loans and how they have been affected by the Covid-19 Pandemic.
- The pause on most federal student loans is automatic and you DO NOT need to opt-in. Eligible federal students are automatically being placed in an administrative forbearance from March 13, 2020 until September 30, 2020. Auto-debits are suspended during this period. If you already made a payment after March 13, you can request a refund by contacting your servicer. During this time, interest on most federal student loans will be changed to 0%. Servicers are required to contact you no later than August to remind you that your payments will resume in October, 2020.
- Most, but not all, Federal Loans qualify for these new benefits including the 6-month payment pause and 0% interest. Under the law, federal Direct Loans all qualify as well as Federal Family Education Loans (FFEL) that are held by the Department of Education. The Department of Education guidance explicitly states that the 0% interest benefit applies to all federal student loans, but excludes commercially-held FFEL loans, college-held Perkins Loans, and private loans.
- The Department of Education states that suspended payments WILL be counted toward PSLF if you meet all other loan forgiveness requirements. These requirements include if: (1) you have direct loans, (2) were on a qualifying repayment plan prior to the event, and (3) continue to work for an eligible employer. If you have any questions regarding your ability, contact FHR to schedule an appointment with a Certified Student Loan Counselor.
- On March 25, the Department of Education announced a pause on debt collection against borrowers who are in default— including wage garnishment, reduction of tax refunds, and reduction of Social Security and Social Security disability benefits. The pause on debt collection applies only from March 13, 2020 to September 30, 2020. If collections against you were being processed after March 13, you are eligible for a refund on that amount. The Department of Education already announced that it would refund more than 830,000 borrowers approximately $1.8 billion in “Treasury offsets” that were still being processed when the pandemic was declared a national emergency on March 13.