COVID-19 and Student Loans
On March 27th the Federal Government approved the Coronavirus Aid, Relief, and. Economic Security Act or CARES Act. This legislation is aimed at providing economic relief for the damage caused by the COVID-19 pandemic. CARES is meant to keep individuals and business afloat while the entire nation deals with “stay at home” orders. The CARES Act provides for direct payments for citizens, loans to small business and fund for public health programs. The CARES Act also provides for student loan assistance.
Beginning on March 13, 2020 and running thru September 30, 2020 federal student loan interest will be set at 0%. These provisions apply to Direct Loan programs (both defaulted and nondefaulted), FFEL Loan (both defaulted and nondefaulted) and Federal Perkins Loans. Please not that some FFEL are privately owned and some Perkins loans are owned by the university. These types of loans are not eligible under the CARES Act.
To determine if your loans are eligible you can contact your loan servicer online or by phone. Your loan servicer is the entity that you pay for monthly loan amount to. You can also contact studentaid.gov for more information.
In addition to a 0% interest rate on eligible student loans for 6 months, the CARES Act will place your student loans in administrative forbearance for 6 months. During this time, you are not required to make your monthly minimum payment. Nor will your loans accrue interest charges.