Yesterday the U.S. Education Department (ED) announced the extension of the forbearance on all student loans held by the federal government. This means that, through January 31, 2021:
- Interest isn’t being charged on your loans;
- You’re not required to make payments on your loans, although you may do so if you wish; and
- If you would have been required make payments on your loans, January will be another month that counts toward the months you need to qualify for Public Service Loan Forgiveness, forgiveness under the federal income-driven repayment plans, and loan rehabilitation agreements — whether you choose to make payments or not.
Remember that “loans held by the federal government” means all loans borrowed under the:
- Federal Direct Loan Program (FDLP);
- Federal Family Education Loan Program (FFELP), if the banks or other lenders that once owned them transferred ownership to ED; and
- Federal Perkins Loan Program, if the postsecondary schools that once owned them transferred ownership to ED.
This extension may lead to an even longer forbearance — something in which President-Elect Biden and congressional Democrats are interested due to the COVID-19 economic crisis.
Keep following the College Affordability Solutions website for more news about this forbearance in the future.