Disclaimer: I am not a representative of the Department of Education in the U.S.A nor am I representative of any student loan servicer. I am merely reposting this information for your and my knowledge
Most everyone who has student loans has found out what exactly this entails.
My loans are accruing at a 0% interest rate right now, but I will call and make sure on Monday. All information is grabbed from Federal Student Aid.
What does this mean?
This adjustment will be retroactive will be effective as of March 13, 2020. Payments will still be due, but payments will now be towards the capitalized interest as of March 13 or the principal if there is no capitalized interest. Essentially, if you have the opportunity, you can pay your capitalized interest off and try to knock away at the principal.
During this period of no interest, if you continue to make payments, the full amount will be applied to principal. However, if your loan had already accrued interest prior to President Trump’s March 13 announcement, your payments will first be used to pay off that outstanding interest.
Who is eligible?
This will only apply to loans that were disbursed by the Department of Education. So, those with private student loans and those who have refinanced with a private company are not eligible. Although, it doesn’t hurt to call your loan servicer and ask for sure.
This interest-waiver is to last 60 days from March 13, 2020. From then it will be determined whether or not it needs to be extended.
Update: This has now been extended to September 30, 2020, under the CARES Act.
What about if I am an ex-pat?
As an ex-pat as well, my student loan fell under this umbrella. I was told to make payments as normal. I am under the Income-Driven Repayment (IDR) Plan. My payments have been updated based on my income, they did rise to about $120.00. It used to be $0.00.
Essentially continue paying your normal payment or contact your loan servicers if there are any issues.
Update: This has now been extended to September 30, 2020, under the CARES Act. All Federal Student Loans are under administrative forbearance, so no payments are required until September 30, 2020. However, due to the terminology of forbearance, it is possible that a lump-sum payment will be required after this period ends. Contact your loan servicer for more information.
Other Government Websites
For more information, you can contact several governmental websites. This is also posted on the Federal Student Aid website. If you have any questions, please look at that.
- Coronavirus.gov — The Centers for Disease Control and Prevention offers this site, which features everything from prevention tips, common symptoms, and current updates on how many cases there are in the United States, to advice about travel and a list of frequently asked questions.
- USA.gov coronavirus page — USAGov shares how agencies across the federal government are responding to the outbreak.
- Federal student loan servicers — Our website lists servicer contact information for borrowers who want to ask questions, request a deferment or forbearance, etc.
- U.S. Department of Education COVID – 19 information for schools and school personnel
- Information for Financial Aid Professionals website (for postsecondary school financial aid staff; look for information in the “Letters and Announcements” section)