- On Friday, President Trump announced that all federal student-loan borrowers now have the option to suspend their monthly payments for “at least the next 60 days.”
- However, borrowers will still need to contact their student-loan servicer to request forbearance, it is not automatic for everyone.
- In addition, federal lenders will automatically reduce all borrowers’ interest rates to 0%.
- Trump had previously announced that interest would be waived on all federal student loans “until further notice.”
- This article is being updated as more details become available.
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The federal government is extending further financial relief to millions of student-loan borrowers.
On Friday, President Trump announced during a White House press conference that all Americans with federal student loans will have the option to pause their payments for the next two months.
In addition, every borrower will automatically have their interest rate set to 0%, effectively waiving interest during this period, the US Department of Education explained in a press release. Last Friday, Trump announced the federal government would waive interest on all student loans “until further notice.”
Typically, federal student-loan borrowers have to qualify for deferment or forbearance based on certain financial hardships and at the discretion of their lender. Even still, some types of loans continue to accrue interest while payments are paused.
However, in order get payments suspended during this national crisis, borrowers will still need to contact their student-loan servicer to request forbearance, it is not automatic for everyone.
“These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted,” US Secretary of Education Betsy DeVos said in a statement. “Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing. I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.”
The forbearance period for federal borrowers will last for “at least 60 days” and retroactively begin on March 13, 2020. Any borrower who was more than 31 days late – also known as delinquent – on their payment as of March 13 will receive an automatic suspension of payments, according to the US Department of Education. If a borrower becomes delinquent during the government-mandated forbearance period, their payments will automatically be suspended as well.
Borrowers who continue to make their monthly student loan payments will apply the full amount of their payment to the principal balance, “once all interest accrued prior to the president’s March 13 announcement is paid.”
For more information about managing your student loans during the coronavirus national emergency, visit the US Department of Education’s website.
This article is being updated as more details become available.
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