The government is offering temporary relief from the monthly payments of federal student loans. There’s no application or documentation required; enrollment is automatic and retroactive from March 13, 2020. If you enroll in this program, your lender will pause all payments for up to three years (starting on April 13, 2020) while interest continues to accrue on your loan balance. If you’re not making payments on your student debt, there’s no need to worry; this plan was designed specifically with borrowers who lost a job during the outbreak crisis in mind. It gives them some time to get back on their feet before they have to start paying off those loans again.”
Stimulus Student Loan Relief
It applies to loans owned by the federal government.
This U.S. Department of Education loan relief program is only available to borrowers who have federal student loans that are owned by the government. It does not apply to private student loans, mortgages, credit cards and car loans.
It doesn’t apply to private student loans.
The stimulus student loan relief only applies to federal student loans. If you have private student loans, it’s important to know that these are not covered by the stimulus student loan relief. Private student loans are not owned by the federal government, and they’re not eligible for any of the programs that make up this package of help for students with their outstanding debt.
If you have private student loans, consider talking with an independent specialist who can help you explore your options for finding a solution.
Enrollment in paying at least 0\% of your federally-owned student loan balance monthly through at least September 30, 2020.
If you are eligible for the Pay As You Earn, Income-Based Repayment, or Income-Contingent Repayment (ICR) plans and have not already enrolled in one of those programs, your loan servicer will enroll you automatically. If they don’t do so, log into your account at StudentLoans.gov to see if they can help you with enrollment.
If you are not on one of these plans, but want to be, contact your student loan servicer directly and ask them how to enroll in one of these plans.
You can enroll yourself or your loan servicer will enroll you automatically.
You can enroll in the program by logging into your account. You can also call or send an email to your loan servicer to enroll.
Your loan servicer will help you complete the application process and verify that you meet all eligibility requirements for this program. If they do not enroll you automatically after receiving a notice, they must still help you complete the application process and submit any required information within three days of receiving such a request from you.
There’s no application or documentation required; enrollment is automatic and retroactive from March 13, 2020.
The Department of Education has announced that the stimulus student loan relief program is now available to those who have been laid off or who lost a job in the past 12 months. You do not need to submit an application or documentation and you are automatically enrolled in this program if you qualify. The student loan forgiveness will be retroactive from March 13, 2020, which means that as long as your employer meets the criteria set out by the Department of Education, you may receive up to $2,500 per year (up to $5,000 total) for each year you were unemployed.
If you make payments on the loan, you’ll get credit for those payments.
The good news is that if you have a student loan under the Federal Family Education Loan Program, your payments are added to your principal balance. So if you’ve already made payments on the loan, those won’t be lost during the suspension period. Instead, they’ll be applied to your principal balance after the suspension ends and your payment becomes due again.
The bad news is that if you don’t make any more payments during the suspension period and then fail to deal with it when it comes back into effect at its original monthly payment amount (or higher), you may lose all of those past payments. If this happens, you’ll be starting from scratch with an even higher payment than before—and this can make it difficult to keep up with things like rent or food costs while still paying off loans in full within 10 years of entering repayment status
If you’re not making payments on your student debt, interest will continue to accrue through September 30, 2020.
If you’re not making payments on your student debt, interest will continue to accrue through September 30, 2020. However, if you were approved for a student loan repayment suspension, the Department of Education will not charge any more interest accrual during the period of your payment suspension.
After that date and if you have made at least one monthly payment during the suspension period (which means no missed payments), then any capitalized principal and interest will be released from escrow and applied to principal balances for all of your eligible loans. So even if nothing else is done after this point in time beyond simply continuing with payments being taken out automatically—and no new changes occur—you’ll still have some relief from what was previously owed by having had unpaid balances reduced by $0
Any monthly payments made during the suspension will be applied directly to your principal balance at the end of the suspension period.
Any monthly payments made during the suspension will be applied directly to your principal balance at the end of the suspension period. You will not be responsible for any accrued interest and late fees, but collection fees may apply if you default on any portion of your student loan payment before the end of the suspension period.
Pausing monthly payments and accruing interest on federal student loans can give borrowers some breathing room if they’ve lost a job or seen their hours cut during the outbreak.
- If you’re in a financial bind, it’s possible to pause your monthly payments for up to three years. During this time period, interest will continue to accrue on both subsidized and unsubsidized federal student loans.
- After the suspension period is over, you’ll have to pay all of that accrued interest—or else risk defaulting on your loan(s).
- Your loan servicer may allow you to make payments before or during the suspension period if you can afford them; however, these payments will be applied only toward principal balance rather than interest or fees (depending on what type of debt it is).
Closing
I hope this information helps you understand what’s happening with student loan relief, and how it could affect you. If you have questions about your specific situation, please contact your loan servicer so they can help guide you through the process.