In response to COVID-19, President Trump signed the CARES Act. As a result, the government temporarily waived future interest charges and suspended payments on certain federal student loans through September 30, 2020. Former President Donald Trump extended the student loan benefit until December 31, 2020, and President Joe Biden extended the pause on payment and interest until December 31, 2022.
Here’s what you can expect:
Which loans are eligible for the interest rate waiver?
The interest waiver initially only impacted federal student loans held by the federal government. As of March 30, 2021, the Department of Education (ED) expanded the benefit to FFELP (also known as FFEL) loans in default held by private parties.
The government is not covering interest charges for private student loans like those provided by College Ave or other private lenders.
Does this change my required monthly payment on federal student loans?
Yes. Federal Direct loan(s) that are not in default and FFEL loans owned by the government have all payments automatically suspended through December 31, 2022.
As of March 30, 2021, the interest waiver and payment pause was expanded to federal student loans made through the Federal Family Education Loan (FFEL) Program currently in default. The change has been made retroactive and loans will be brought back to good standing with the ED and default records will be removed from credit bureaus. For more info, visit the Coronavirus and Forbearance help page on the Federal Student Aid website.
You should continue to review all your monthly student loan statements for any changes and to make sure you know which loan(s) are covered by the CARES Act.
What do I do if I can’t make my payments on loans that aren’t held by the Federal Government?
If you have a privately held FFEL loan in default, you may be able to take advantage of the interest waiver and payment suspension. Check with your loan servicer to confirm.
If you can’t make your monthly payments. Don’t ignore the problem. Contact your federal and private loan servicer(s) to discuss your options. You may be eligible for deferment or forbearance to temporarily put your payments on hold.
If you can’t make payments on your College Ave loans because of COVID-19, learn more about the program we have available.