by Shannon Vasconcelos, former financial aid officer at Tufts University
Important news for student loan borrowers coming out of the Department of Education this weekend!
Secretary of Education Betsy Devos announced the extension of the automatic loan forbearance for federal student loan borrowers through January 31, 2021. This forbearance was originally granted by the CARES Act and was scheduled to end September 30, 2020. President Trump later extended the forbearance by executive action through December 31, 2020, and Devos’ latest action ensures that struggling borrowers will not need to make payments prior to the new administration taking office in late January.
Key points for borrowers include:
- No payments on federal student loans will be required prior to January 31.
- No interest will accrue on these loans during this time.
- No collections activity will be undertaken.
- Non-payments will count as if payments were made for the purposes of Public Service Loan Forgiveness, income-driven repayment plans, and loan rehabilitation agreements.
Refer to our post, COVID-19 and Student Loans: How to Get Relief, for details and frequently asked questions about the federal student loan administrative forbearance, including why borrowers who can afford to do so may want to continue making monthly loan payments. And stay tuned to the Bright Horizons College Coach Insider Blog for any student loan policy changes to come as they are announced by the Biden administration.