Federal Student Loan Payments Officially Suspended Until 2021

Date: August 23rd, 2020 6:55 PM Author: .........,,,,,,,,,.........,,,,,,,,, EDITORS' PICK|398,346 views|Aug 21, 2020,08:12pm EDT Federal Student Loan Payments Officially Suspended Until 2021: 0% Interest, No Collections, And Nonpayments Count Toward Forgiveness Rob BergerSenior Contributor Personal Finance I write about building wealth and achieving financial freedom. Student loan relief GETTY IMAGES U.S. Secretary of Education Betsy DeVos today implemented President Trump’s memorandum extending relief on federally held student loans to borrowers through the end of the year. Her actions also addresses collections on defaulted loans and whether non-payments during this time will qualify for forgiveness under an income-driven repayment plan or the Public Service Loan Forgiveness program. Here’s what we know. Presidential Memorandum on Student Loan Relief The CARES Act passed earlier this year suspends payments on federally held student loans until September 30, 2020. During this time, collections on defaulted loans were halted, and the non-payments counted toward the 120 payments required by the Public Service Loan Forgiveness (PSLF) program and as payments required for other forgiveness under an income-drive repayment plan. With uncertainties surrounding negotiations of another stimulus bill, Mr. Trump signed an Executive Memorandum on August 8 related to student loan relief. The memorandum directed Secretary DeVos to “provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.” Of concern to many was whether this action would also cover the suspension of collection efforts and how non-payments would be treated for purposes of various loan forgiveness programs. FORBES ADVISOR (COVID-19) Federal Student Loan Forbearance Calculator: How Will You Be Affected? Secretary DeVos Fully Implements Student Loan Payment Suspension Today Secretary DeVos announced that she has fully implemented Mr. Trump’s directive. Specifically, she has directed Federal Student Aid (FSA) “to extend the student loan relief to borrowers initiated by the President and Secretary in March 2020 through December 31, 2020.” Interest on eligible federal student loans has also been set to 0% during this time: “All borrowers with federally held student loans will have their payments automatically suspended until 2021 without penalty. In addition, the interest rate on all federally held student loans will be set to 0% through the end of the calendar year.” Borrowers have the option to continue making payments during this time. Such payments would be allocated to the principal of the loan, enabling borrowers to pay off their loans more quickly and at a lower cost. Federal Student Loan Collection Actions Secretary DeVos also announced that collections on defaulted, federally held loans will continue to be halted. In addition, any borrower with eligible federal student loans whose wages are being garnished will receive a refund of those amounts. The full statement on this issue reads: “During this extended time frame for the payment suspension, collections on defaulted, federally held loans are still halted, and any borrower with defaulted federally held loans whose employer continues to garnish their wages will receive a refund of those garnishments.” Non-payment of Student Loans Counts Toward Forgiveness One significant uncertainty was how Mr. Trump’s executive action would affect those pursing loan forgiveness programs. The action today makes clear that non-payments will continue to count toward these programs: “Non-payments by borrowers working full-time for qualifying employers will count toward the 120 payments required by the Public Service Loan Forgiveness program and as payments that are required to receive forgiveness under an income-driven repayment plan.” FSA is working with student loan servicers to notify borrowers of the extension of this relief. The notice states that the outreach program will continue into the fall and to an eventual return to student loan repayment. Borrowers should see this new extension reflected in their accounts over the next several weeks. Get the best of Forbes to your inbox with the latest insights from experts across the globe. Follow me on Twitter or LinkedIn. Check out my website or some of my other work here. Rob Berger Rob is the Deputy Editor of Forbes Money Advisor, host of the Financial Freedom Show, and the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of…Read More Loading ... Also on Forbes Personal Finance INNOVATION BrandVoice: Mobility With A Conscience: How Seattle Goodwill Gives Marginalized Communities Hope In A Pandemic PERSONAL FINANCE Tax Mistakes In 2020 That Could Ruin Your Retirement © 2020 Forbes Media LLC. All Rights Reserved. AdChoicesPrivacy StatementDo Not Sell My InfoTerms and ConditionsContact UsReport a Security IssueJobs At ForbesReprints & PermissionsForbes Press RoomAdvertise (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799509)    Date: August 23rd, 2020 7:06 PM Author: gedood persoon Odds of this getting extended again? (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799540)    Date: August 23rd, 2020 7:07 PM Author: lottery 100000%. Lmao at my deal. My shitlaw boss paid mine off for me and I owe him an interest free loan payback. It was his incentive to keep me. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799548)    Date: August 23rd, 2020 7:08 PM Author: Ricky (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799551)    Date: August 23rd, 2020 7:09 PM Author: '"'"'"''" (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799553)    Date: August 23rd, 2020 7:15 PM Author: A Worn Out Recording of a Favorite Song how much did you have? sounds like a 180 shitlaw boss. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799579)    Date: August 23rd, 2020 7:30 PM Author: lottery Around $250k. He looks at me as a son. When I was making like $70k in my second year I saw this kid in the office next to ours with less experience as a lawyer get a raise to $80k. I got an offer so some rinky dink local midlaw type firm. The offer was for $80k but it was an insurance mill and it was outside of NYC (hes one of those NYC true believers). He gave me a stern talking about how I need to learn to bring my own business in and once I do I’ll get a cut. Then I made it about my student loans. He asked me how much I owe and laughed and said at least it’s not $2 million, you can work with that. Then I told him the interest rate and he spit his coffee out. He told me if I stay he will take care of that, I just have to pay him back. I’ll be done paying it off in March even though I can pay it off right now (he kind of forgot about it lmao). Fun fact he also told me that the firm the kid making $80k at is not going to exist in two years. Almost exactly at the two year make they dissolved the firm and he’s working a non law boring job making probably $80k. Last year my AGI was over $400k. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799630)    Date: August 23rd, 2020 7:32 PM Author: Dickey Simpkins He should be careful with his coffee. He could get sued if he spit it on someone and burned them. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799634)    Date: August 23rd, 2020 7:35 PM Author: A Worn Out Recording of a Favorite Song flame. no one would pay off 250k of debt. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799639)    Date: August 23rd, 2020 7:36 PM Author: lottery At the time I thought he was doing me a favor. Looking at it now, no one is going to pay it back. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799644)    Date: August 23rd, 2020 7:38 PM Author: A Worn Out Recording of a Favorite Song i dont follow lol (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799647)    Date: August 23rd, 2020 7:39 PM Author: lottery He did me a favor. I owe it to him to pay it off, which is why I did. At the end of the day I will have paid off $250k. If I still had federal loans, I would have just paid 0 like everyone else. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799652)    Date: August 23rd, 2020 7:52 PM Author: "'''"'''" This is a Johnsmeyer flame poast (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799705)    Date: August 23rd, 2020 7:15 PM Author: Mike Fart (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799583)    Date: August 23rd, 2020 7:40 PM Author: ..,..,.,,,...,...,..,,..,,,,.,,.,,...,,..,,.,.,.,, never stop johnsmeyer (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799655)    Date: August 23rd, 2020 7:47 PM Author: ARBEIT MACHT FREI (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799685)    Date: August 23rd, 2020 7:48 PM Author: gedood persoon (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799693)    Date: August 23rd, 2020 7:51 PM Author: potluck (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799701)    Date: August 23rd, 2020 7:53 PM Author: .........,,,,,,,,,.........,,,,,,,,, (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799711)    Date: August 23rd, 2020 7:59 PM Author: CapTTTainFalcon (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799738)    Date: August 23rd, 2020 7:52 PM Author: Person, Woman, Man, Camera, TV I paid all of mine back at 8.5 percent. FMA. (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799703)    Date: August 23rd, 2020 7:54 PM Author: gedood persoon Lol why? (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799712)    Date: August 23rd, 2020 8:41 PM Author: ARBEIT MACHT FREI cq (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799958)    Date: August 23rd, 2020 8:42 PM Author: '"'""'"'''"" this actually fills me with rage knowing i paid all of this shit off in cash just 2 years ago (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799965)    Date: August 23rd, 2020 8:43 PM Author: ,.,,,,....,,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,.,,.,.,. (Status: away) don't worry you'll get to pay off some more student loans soon haha (http://www.autoadmit.com/thread.php?thread_id=4609153&forum_id=2#40799974)