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Student Loans & COVID-19
Frank Malara • Apr 30, 2020

 

Student Loans & COVID-19

If you’re one of 44.7 million Americans with student loan debt, you may be eligible to receive debt relief from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  

Knowing your choices will help you make other prudent decisions about your finances during this unprecedented time . 

The CARES Act only applies to federal student loans. 

The CARES Act directed federal student loans owned by the United States Department of Education, to go on administrative forbearance from March 13, 2020 until September 30, 2020.  

This means you can discontinue making payments on those loans now through September 30, 2020.

If you elect to continue to make payments during the forbearance period, the full amount of your payments will be applied to the principal of your loan once all the interest that accrued prior to March 13 is paid. So any payments you make during forbearance may help you pay off your loan faster. 

If your monthly loan payment is automatic or you use an ACH, check your statements! If a loan payment has been processed after March 13, you may be entitled to a refund. Please contact your loan servicer .

Note: There are some federal student loans that are no longer owned by the federal government, for instance the Federal Family Education Loans and Perkins loans are now owned by commercial lenders and the institution you attended.

Is there any relief for privately held student loans?

Yes, if you’re in New York State. 

For privately held loans, the New York State Department of Finance and the largest student loan servicers in the State agreed to provide relief for borrowers experiencing financial hardship . Relief includes:

  • 90 days of deferred monthly payments.
  • No late payment fees. 
  • No negative reporting to credit bureaus.
  • Enrolling eligible borrowers in long-term assistance programs.

You must contact your student loan servicer directly and request relief due to financial hardship related to COVID-19. 

Additional Resources

Not sure what type of student loan you have? Check your monthly statement or your credit report to see if your loan servicer is on the complete list of federal loan servicers here.

More questions? Call the Federal Student Aid Information Center for assistance (FSAIC) at 1-800-433-3243.

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