Student Loan Relief Extended Through the End of the Year

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March, which caused a 6 month automatic payment suspension on federal student loans through September 30, 2020. This August, the president signed a memorandum to extend that relief through December 31, 2020.

What does this mean for student loan borrowers? Those with federally held student loans will find their payments have been automatically suspended through 2020 without any penalties. In addition, no interest of any sort will be added to the loans — the interest rate will remain at 0% through 2020. Collections on defaulted loans have been halted as well, and borrowers with defaulted loans whose employers continue to garnish their wages will receive a refund of those garnishments. Borrowers do not need to take any action to halt their payments, as it will be done automatically. Borrowers will be notified of the extension throughout the fall and can expect to see this reflected in their student loan accounts.

Should you continue to pay your student loans even with the extension? Borrowers do have the option to continue making payments on their federal student loans throughout the extension. In fact, if you can continue to pay your loans while the interest rate is at 0%, your payments will reduce the principal balance, which will allow you to pay off your loans sooner and at a lower cost.

What if you decide to participate in the Public Service Loan Forgiveness program or have an income-driven repayment plan? If you decide to participate in the Public Service Loan Forgiveness (PSLF) program and are working full-time for a qualifying employer, nonpayments will count toward the 120 payments required by the PSLF program. If you have an income-driven repayment (IDR) plan, payments you would have made, but are no longer required to make, will count toward IDR plan loan forgiveness. For more information on U.S. Department of Education efforts to assist student loan borrowers during the pandemic, visit

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