As we are dealing with these unprecedented and trying times, many people are being faced with great financial uncertainty. One of the biggest financial concerns relates to student loan debt. Thankfully, for those with federal student loans, the Department of Education has worked with the government to provide much needed relief via the CARES Act.

Student loan forbearance allows you to temporarily stop making payments. The CARES act temporarily reduces interest rates to zero percent as well as puts payments on hold until September 30. Please note, these changes unfortunately do not apply to private student loans. Be sure you contact your lender to see if you qualify and/or if any arrangements can be made.

CARES Act Summary:

  • As of March 13, 2020, all payments have been stopped until September 30, 2020.
  • When the forbearance expires on September 30, payments will resume.
  • You can keep paying your loans, if you are able to. You can either make payment by contacting your lender by phone, through their website or opt out of the forbearance and have your automatic payments resumed.
  • If you decide to opt out, but your situation changes, you can still opt in to forbearance. Contact your lender to opt in and no payments will be due until the September 30 due date.
  • If you made a payment(s) since March 13, you are entitled to a refund since that is when the forbearance went into effect.
  • You can also get refunded any payment(s) made between March 13 and September 30.
  • For those people who have defaulted on their loans, the government will no longer withhold their income until this forbearance period ends. Any withholding that was made after March 13 can be returned to you. However, if the wages were taken before March 13, that money will not be returned.
  • As of March 25, 2020, all private collection agencies have stopped making collection calls, sending letters and/or mailing billing statements.