In response to the ongoing coronavirus (COVID-19), the US Department of Education has announced temporary relief for borrowers.
- Interest rates for all federal student loans will be temporarily dropped to 0%.
- Two-months forbearance will be automatically approved for any student or graduate who requests it.
The department’s action follows a White House press conference on Mar. 20 where President Donald Trump promised to make the temporary suspension.
How to get relief from student loans during the COVID-19 Crisis
First, your loan must be a federal student loan. The relief is for students, borrowers, and parents. Private student loans are not covered by the temporary relief measures.
Interest rates. All federal student loan interest rates will be temporarily dropped to 0%. During the period of no interest, the full amount of your payments will be applied to the principal. This means that you are likely to pay your balance down more quickly during this zero-interest period.
You don’t have to request the zero percent interest rates. The department will automatically adjust your account so that interest doesn’t accrue. The account adjustment will be effective on March 13, 2020.
If you request a two-month forbearance to get relief from payment, interest will not accrue (accumulate) while you are in forbearance. That’s because interest is being waived during the COVID-19 national emergency. If you request an administrative forbearance, you will not have any payments due for two months.
Forbearance. A two-month administrative forbearance will be automatically approved for any student or graduate who requests it from their loan servicer. Being in an administrative forbearance means that you can temporarily stop making your federal student loan payments without becoming delinquent. Interest will not accrue (accumulate) while you are in forbearance. Payments must resume after administrative forbearance ends.
Past due loan payments. If you’re at least 31 days behind on your payment as of March 13, 2020, or become more than 31 days delinquent after that date, you’ll automatically be placed in the administrative forbearance to give you a safety net during the COVID-19 emergency. You should verify with your loan servicer to ensure you’ve been placed in administrative forbearance.
These are emergency measures to address borrowers that may experience financial hardship due to the coronavirus outbreak. The Department of Education may decide to extend the zero percent interest rates and the automatic forbearance relief measures.
If the option for an administrative forbearance is extended, your loan servicer will communicate information about the extension to you.
The situation remains fluid so check the Department of Education’s site for updates.