Federal Student Loan Relief
How does it work? What should you do?
Provided by Denise B. Barrows, CPA, CFP®
Are you or someone you know currently making federal student loan payments? In light of the COVID-19 pandemic, some welcome relief may be on the way.
Thanks to the recent passage of the CARES Act, the U.S. Department of Education will allow you to temporarily halt your federal student loan payments from March 13, 2020 until September 30, 2020.1
What should you do next?
At this time, no action is necessary. As part of this relief initiative, all federal student loans will be placed in an administrative forbearance and automatic payments will be paused from March 13 to September 30, 2020.
What about the interest?
Good news! During this same time period, interest rates are being set to 0% on the following types of federal student loans:2
- Defaulted and non-defaulted Direct Loans
- Defaulted and non-defaulted FFEL Program loans
- Federal Perkins Loans
What if I want to keep making payments?
It’s important to keep in mind that payments are still being accepted during this time period, but they won’t be automatic or required. Depending on your situation and goals, continuing to pay down your federal student loans may make sense, even during this challenging time.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM. Insurance services offered through an Avantax affiliated insurance agency.
1 – Ed.gov, 2020
2 – Studentaid.gov, 2020