Sam McElroy returns to the program… Student loan borrowers can suspend payments for 60 days without interest Borrowers with federal student loans will be able to pause their payments for two months without interest accruing, President Donald Trump and the Education Department said Friday. The move is an effort to help those financially affected by the spread of the coronavirus. Trump had announced last week the government would waive interest on federally held loans last week, but few details had been available. The suspension will be in effect for at least 60 days, and it started on March 13. “Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing,” said Education Secretary Betsy DeVos in a news release. “I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.” Colleges have gone online: In two weeks, the future of college has become uncertain, thanks to coronavirus Borrowers will have 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 still want to make their payments can do so. The payment in that case would be applied directly to the principal balance, which may allow some borrowers to pay off their loan more quickly. Those in the Public Service Loan Forgiveness program who have to make 120 payments before their loan is forgiven may also be interested in continuing to make payments, the release said. College student loans: Debt hits a new high in 2018, though growth slows, as free tuition plans spread. The department also authorized suspension of automatic payments for borrowers more than 31 days delinquent as of March 13, or anyone who becomes 31 days delinquent. Pausing loan payments is one of the many financial measures lawmakers have considered to ease the financial burden caused by the coronavirus. Some Senate Democrats have proposed that the Education Department be authorized to make payments on borrowers’ loans. Senate Majority Leader Mitch McConnell’s plan called for a pause for three months and would give DeVos the ability to suspend payments for an additional three months on top of that.
Sign up (on the right side) for the instant free Financial Survival Toolkit and free weekly newsletter.