NAICU Washington Update

Student Loan Relief Extended

December 09, 2020

The Department of Education announced it was extending student loan relief provisions included in the CARES Act until January 31, 2021.  The move by the Department extends the following protections for students, which were set to expire on December 31, 2020:
  • The suspension of federal student loan payments, including principal and interest.
  • The ability of suspended payments to be considered as on-time payments for the purposes of loan forgiveness and loan rehabilitation programs.
  • The ability of suspended payments to be considered as on-time payments with regard to consumer reporting agencies. 
  • The suspension of all involuntary collection regarding the loan to include wage garnishment, tax refund reductions, and reductions to federal benefits by administrative offset. 
Only borrowers who have Federal Family Education Loans or Direct Loans held by the Department are guaranteed to benefit from this extension.

As a result of the Department’s action, federal student loan borrowers will not be expected to make payments through January 2021, however, they will continue to be able to make payments, if they so choose, and benefit from the 0% interest rate as they pay down principal. Non-payments will continue to count toward the number of payments required under an income-driven repayment plan, a loan rehabilitation agreement, or the Public Service Loan Forgiveness program.