03/24/2020
White House Suspends Federal Student Loan Payments For 60 Days.
Politico (3/20, Staff) reported President Trump on Friday announced the Education Department will allow “the nation’s more than 42 million federal student loan borrowers to take a break from making their monthly payments, without incurring interest or penalties for at least the next two months.” In addition to suspending payments, the ED “said it would set the interest rates on all federally held student loans to zero until at least May 12.” Trump said student borrowers won’t be required to make loan payments “for at least the next 60 days and if we need more we’ll extend that period of time.”
The Washington (DC) Post (3/20, Douglas-Gabriel) reported Education Secretary Betsy DeVos said in a statement, “These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted.” DeVos added, “Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing.”
USA Today (3/20, Quintana) reported the new interest rate will be retroactive to March 13, when the policy went into effect. The suspension is not automatic: borrowers will be required to “contact their loan servicers to request the pause in payments. It’s unclear how quickly those agencies will be able to respond to those requests.” Those who want to continue making their payments can do so; the payment “would be applied directly to the principal balance, which may allow some borrowers to pay off their loan quicker.” Participants in the Public Student Loan Forgiveness program “who have to make 120 payments before their loan is forgiven may also be interested in continuing to make payments.”
NPR (3/20, Nadworny) reported the ED “has also authorized an automatic suspension of payments for any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent, essentially giving borrowers a safety net during the national emergency.”
