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Continued Student Loan Payment Relief During the COVID-19 Pandemic
Back in April, I wrote about Student Loan Forbearance During Coronavirus under the CARES Act. Under the CARES Act, federal student loan payments were put on automatic forbearance by the U.S. Department of Education until September 30, 2020.
On August 8, 2020, with a little less than two months left on the original forbearance period, President Trump signed a Presidential Memorandum to the Secretary of Education continuing student loan payment relief during the COVID-19 pandemic. In the Memorandum, the President authorized the Secretary of Education to
- provide deferment to borrowers as necessary to continue the temporary cessation of payments and
- waive all interest on student loans held by the Department of Education until December 31, 2020.
This means that until December 31, 2020, loan payments are suspended, collections are stopped, and interest is waived on Department of Education-held student loans.
Borrowers can continue to make payments if they choose to do so, which may allow some borrowers to pay off their loans more quickly and at a lower cost.
Many student loan servicers are in the process of updating their accounts to reflect the forbearance extension. Keep an eye on your account, especially towards the end of September, to make sure that the extended forbearance period has been applied to your account.
Bear in mind, this only applies to federal student loans. If you are having difficulty paying your private or other non-federal student loans, contact your loan servicer to discuss repayment options to avoid penalties and credit implications.