Hopefully you already know that the U.S. Education Department (ED) has extended two forms of COVID-19 relief on your federally held student loans — interest on those loans will continue to be 0%, and monthly payments you would otherwise owe have been automatically suspended. Both have been extended from September 30 through December 31.
While you’re not making monthly payments on these loans, will you still be able to count October, November, and December toward time-based loan forgiveness options for them? Yes, they will!
The forgiveness options to which we’re referring go into effect after:
- 240 to 300 monthly payments made within the income-driven loan repayment plans; and
- 120 monthly payments made by a full-time government or nonprofit employee working toward Public Service Loan Forgiveness.
Do you have “federally held student loans?” Yes, if ED made them to you under the Federal Direct Loan Program, of if their ownership was transferred to ED by commercial lenders that made them under the old Federal Family Education Loan Program or by your college under the old Federal Perkins Loan Program.
This extension prolongs identical forgiveness provisions established by Congress for March 13 through September 30 under last March’s CARES Act. According to Forbes Money Advisor, it was announced at a recent press conference by ED Secretary Betsy DeVos.
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