(From the Financial Literacy Blog) – Are you paying back federal student loans? If so, you may be eligible for student loan relief. Due to COVID-19, qualifying borrowers are automatically being placed in an administrative forbearance, which allows borrowers to temporarily stop making your monthly loan payment. If your student loans are owned by the Department of Education, you may be eligible for the following:
- No payments for six months. You will not have to make payments on your student loans owned by ED until September 30, 2020.
- No accumulating interest. The interest rate on your student loans owned by ED was reduced to 0%, effective March 13, 2020 through September 30, 2020.
- Months in forbearance count toward forgiveness. The number of months your loans remain in the COVID-19-related administrative forbearance will still count towards Income-Drive Repayment Plans and Public Service Loan Forgiveness if all other qualifying factors are met, even though no payments are required to be made during the six-month timeframe.
- Apply payments to principal. If you wish to continue making payments to save money in the long run, you can make payments anytime during the COVID-19-related administrative forbearance. Any payments made during the period of 0% interest (March 13, 2020 through September 30, 2020) will be applied to principal once any unpaid interest that accrued prior to March 13 is paid.
To find out whether you qualify, or if you have any questions about the forbearance period, visit the Federal Student Aid website.