On August 8, President Trump issued a memorandum extending the payment freeze and interest waiver from the CARES Act until December 31, 2020. This will apply for borrowers with federal Direct loans and federally-held FFEL and Perkins loans.
Now that the Department of Education has provided further details on how the memorandum will be applied, here’s the most up to date information we have about how this executive order will impact borrowers:
- If you’re one of the 40 million people with federal Direct student loans and federally-held FFEL and Perkins loans, your loans will remain in forbearance through the end of the year. This forbearance should be automatically implemented by your servicer and you will not need to take any action if you’re not planning to resume making payments. Interest on federally-held student loans will also not accrue during this time.
- Unsure what type of loans you have? Summer can help. Borrowers can create an account with Summer for free and sync their loans to determine if their loans are eligible for the payment suspension and interest waiver. If you already have an account, you can check your loan type by logging in and clicking ‘My Federal Loans’ in the left hand menu and syncing your loan information.
- You can contact your loan servicer if you’d like to make payments on your federal student loans during this time.
- The payment suspension and interest waiver does not apply to commercially-held Federal Family Education Loans (FFEL) or Perkins Loans, so borrowers with these loans should continue to make payments. If you have these types of loans and are having trouble making payments, Summer can help you assess your options.
- The payment freeze and interest waiver also do not apply to private loans. If you are having trouble making payments on your private student loans, you can contact your private loan company to ask for relief options.
- Suspended payments during this period from September 30 to December 31 will count towards forgiveness programs like income-driven repayment and Public Service Loan Forgiveness.
As details become more clear, we will continue to update our borrowers on these student loan changes. If you have any other questions, feel free to reach out to us at [email protected]