The option for relief will continue through the end of the year.
8/26/2020 9:00
U.S. Secretary of Education Betsy DeVos, following an order from President Donald Trump, directed Federal Student Aid (FSA) to extend the student loan relief to borrowers through Dec. 31, 2020.
Student loan payment relief started in March under an order from the White House and it was first extended in the Coronavirus Aid, Relief, and Economic Security (CARES) Act through Sept. 30, 2020, ACA International previously reported.
All borrowers with federally held student loans will have their payments automatically suspended until 2021 without penalty, according to a news release from the U.S. Department of Education (DOE.) In addition, the interest rate on all federally held student loans will be set to 0% through the end of the calendar year.
Borrowers continue to have the option to make payments on their loans.
During this extended time frame for the payment suspension, collections on defaulted, federally held loans are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments, according to the DOE news release. Non-payments by borrowers working full-time for qualifying employers will count toward the 120 payments required by the Public Service Loan Forgiveness program and as payments that are required to receive forgiveness under an income-driven repayment plan.
FSA is working in partnership with its student loan servicers to notify borrowers of this extension of loan relief measures, and this outreach effort will continue through the fall and toward an eventual return to repayment. FSA’s servicers are working to make these changes, and borrowers can expect to see this extension reflected in their accounts over the next several weeks, according to the DOE.
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