As previously discussed in a blog post, the April passage of the CARES Act contained several provisions for Federally held student loans. Most notably, the Act provided a suspension of all payments and stoppage of all interest accrual through September 30, 2020.
On August 8, 2020, a presidential memorandum was signed to extend some of these provisions through the end of the calendar year. Some key points to consider:
- Payments on federally held loans are not required until January 1, 2021.
- Interest rates will be held at 0% through December 31, 2020 and no interest will accumulate.
- Payments that would have been made during this time period will count for the purposes of Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF) loans in good standing.
This extension serves to give Federal borrowers an additional period of relief from payment obligations during the COVID-19 crisis; however, some borrowers may wish to take advantage of the moratorium to make optional principal-only payments.
For additional information, please contact your Federal student loan servicer, or reach out to us with any questions.
