President Donald Trump says there will be no federal government student loan payments for 60 days.
Here’s what you need to know.
In the wake of the coronavirus outbreak, President Trump today announced that federal student loan payments will be suspended without penalty for the next two months. Trump also said, following up on his previous announcement, that interest on federal student loans will be waived as well as. Details of how Trump’s plan for your student loans the work should be unveiled soon.
According to the US Department of Education, all borrowers with federally held student loans will automatically have their interest rates set at 0% for a period of at least 60 days starting March 13. Borrowers have the option of suspending payment to their federal students without penalty. , and can contact their student loan manager to request administrative forbearance. Education Secretary Betsy DeVos has also automatically suspended federal student loan payments for any borrower overdue for more than 31 days as of March 13, 2020. What if you want to keep paying your monthly student loan in full and you don’t want forfeiture? During the 60-day period, you can still pay your monthly federal student loan payment in full, and your payment in full will be applied to your principal balance only (after all student loan interest by the 13th. March have been paid).
Earlier this week, Senate Democrats proposed suspend student loan payments and cancel student loans of at least $ 10,000. Representative Alexandria Ocasio-Cortez (D-NY) tweeted last week that student loan payments should be suspended. The goal is to help borrowers “incur additional fees, compound interest, or negative incidents reflected in their credit scores.”
Student loans: proposals
US public leaders have stepped up to help borrowers get economic relief. New York Andrew Cuomo temporarily suspension of student loan debt collection and also suspended mortgage payments for those who encounter financial difficulties. Senator Bernie Sanders (I-VT), for example, has offered to forgive the $ 1.6 trillion in student loan debt, including federal and private student loans. Former Vice President Joe Biden has his $ 750 billion student loan plan, which he opposed to the Sanders plan. Biden and Sanders both Support the civil service loan forgiveness program. Last month Trump called for the end of the civil service loan forgiveness program in his annual budget in favor of a simplified income-based repayment plan which would offer the same student loan discount plan for undergraduate borrowers, for example. U.S. Education Secretary Betsy DeVos explained why she thinks it’s a good idea to end this student loan forgiveness program.
Remember, this announcement only applies to federal student loans (not private student loans). Regular payments for private student loans, at this point, would still be due. This upcoming waiver period is a good time to assess your federal and private student loans and determine your best path. Here are four starting points, all free: