The CARES Act suspended payments on federally held student loans until September 30, 2020. See our prior post: https://www.fazziolaw.com/blog/student-loan-law-executive-order-suspends-interest-until-2021.cfm
With uncertainties surrounding another stimulus bill, President Trump signed an Executive Order on August 8 related to student loan relief. The EO directed Secretary DeVos to “provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.”
Today the Federal Student Aid ("FSA") was directed "to extend the student loan relief to borrowers initiated by the President and Secretary in March 2020 through December 31, 2020." Interest on eligible federal student loans has also been set to 0% during this time: “All borrowers with federally held student loans will have their payments automatically suspended until 2021 without penalty. In addition, the interest rate on all federally held student loans will be set to 0% through the end of the calendar year.”
Borrowers have the option to continue making payments during this time. Such payments would be allocated to the principal of the loan, enabling borrowers to pay off their loans more quickly and at a lower cost.
Dealing with crushing student loan debt is no different than embarking on a dangerous expedition. You need to plot a course to your destination and adjust as situations develop along the way. We can be your guide and assist you with the process.
Category: Student Loan Law
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