In all that has been going on, student loans are probably not what you wanted to think about right now. But, when Donald Trump signed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) in March 2020, there are some things you might want to know. Here are three highlights of the CARES Act and how they affect those with federal student loans.
Overall, the CARES Act gave those with student loans from the government some relief during this time of COVID. What it does was:
- Set interest rates to 0% for 60 days
- Temporarily stopped collections on defaulted loans
- Suspended loan payments
Zero Percent Interest
Through December 31st, the federal student loan interest rate is 0%. Because private student loans aren’t covered by the CARES Act, the interest rate on private student loans did not change. If you want to find out if your loan interest rate was reduced, this site can help you find out who holds your loan and how to contact them.
Collections on Defaulted Loans
This is exactly what it sounds like. If you have any federal student loans in default or collection status, they will not be calling or asking for repayment through December 31st, 2020.
Suspended Loan Payments
This is some great information. Until December 31st, you do not have to pay on your federal student loans. In fact, if you were making automated payments through your bank or credit card, these were stopped. There was an option to continue to make these payments, but you needed to contact your loan provider to opt-out of the automatic suspension of payments. If you made any auto-debit payments between March 13 and December 31st, 2020, you can have this money refunded to you.
And, since these are just three highlights, we encourage you to visit the Government Student Aid website. There you will find a specific list with more detailed answers to help you navigate your student loans.
Portions of this information are credited to Federal Student Aid. An Office of the US Department of Education.