Department of Education Extends Student Loan Forbearance Through Jan. 31

Borrowers may still make payments if they choose to do so as Congress also considers legislation to extend relief.

12/7/2020 11:00 AM

AdvocacyCOVID-19NewsEducation
Department of Education Extends Student Loan Forbearance Through Jan. 31

Federal student loan forbearance, interest accrual, and collections activity on federal student loans will continue through Jan. 31, 2021.

The loan forbearance was originally set to expire on Dec. 31. The U.S. Secretary of Education announced the extension last week while Congress also continues to debate providing economic relief to consumers through legislation similar to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

As Congress continues to debate a potential stimulus package by the end of the year, there has been some discussion about including additional moratoriums on student loan payments.

Meanwhile, consumers may still make payments on their federal student loans if they choose to do so. According to a news release from the Department of Education, “non-payments will continue to count toward the number of payments required under an income-driven repayment plan, a loan rehabilitation agreement, or the Public Service Loan Forgiveness program.”

ACA International’s members have hardship programs in place to help consumers and encourage consumers to reach out with questions on their loan payments, even during the forbearance period.

“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” Secretary of Education Betsy DeVos said in the news release. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the executive branch, is in charge of student loan policy.”

Federal Student Aid is working with federal student loan servicers to notify borrowers about the relief measures, according to the news release.

Instruction issued in March 2020 for employers to stop wage garnishments for borrowers with defaulted federal student loans also remains in place, and any defaulted borrowers who continue to have their wages garnished will receive refunds, the Department of Education reports.

The loan forbearance started after President Donald Trump declared a national emergency due to the COVID-19 pandemic and using the Department of Education’s authority under the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) ACT. It was extended under the CARES Act. President-Elect Joe Biden may also authorize an extension of the student loan relief. Biden has expressed support of a proposal from Democrats in the U.S. House of Representatives to extend the relief through September 2021 and cancel some student loan debt, according to CNN.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Department of Education Extends Student Loan Forbearance Through Jan. 31

Federal student loan forbearance, interest accrual, and collections activity on federal student loans will continue through Jan. 31, 2021.

The loan forbearance was originally set to expire on Dec. 31. The U.S. Secretary of Education announced the extension last week while Congress also continues to debate providing economic relief to consumers through legislation similar to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

As Congress continues to debate a potential stimulus package by the end of the year, there has been some discussion about including additional moratoriums on student loan payments.

Meanwhile, consumers may still make payments on their federal student loans if they choose to do so. According to a news release from the Department of Education, “non-payments will continue to count toward the number of payments required under an income-driven repayment plan, a loan rehabilitation agreement, or the Public Service Loan Forgiveness program.”

ACA International’s members have hardship programs in place to help consumers and encourage consumers to reach out with questions on their loan payments, even during the forbearance period.

“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” Secretary of Education Betsy DeVos said in the news release. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate. The Congress, not the executive branch, is in charge of student loan policy.”

Federal Student Aid is working with federal student loan servicers to notify borrowers about the relief measures, according to the news release.

Instruction issued in March 2020 for employers to stop wage garnishments for borrowers with defaulted federal student loans also remains in place, and any defaulted borrowers who continue to have their wages garnished will receive refunds, the Department of Education reports.

The loan forbearance started after President Donald Trump declared a national emergency due to the COVID-19 pandemic and using the Department of Education’s authority under the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) ACT. It was extended under the CARES Act. President-Elect Joe Biden may also authorize an extension of the student loan relief. Biden has expressed support of a proposal from Democrats in the U.S. House of Representatives to extend the relief through September 2021 and cancel some student loan debt, according to CNN.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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