I recently sat down with Adam Minsky, an attorney who specializes in student loan law, to learn more about what relief is available for student loan debt during the pandemic.
Joyce: Adam, thanks so much for speaking with me. We know a number of individuals are struggling with student loan debt in general and especially during the Coronavirus pandemic. We understand some relief is provided via the Coronavirus Aid, Relief, and Economic Security Act or CARES Act. Can you tell us more about that?
Adam: The CARES Act suspends all payments and all interest accrual through September 30, 2020, on federal student loans held by the U.S. Dept. of Education. That means no payments are due, and no interest accrues. The Act also suspends collections on defaulted federal student loans held by the Department of Education for the same period.
Joyce: What types of loans are not covered by the Cares Act? Is there any relief for those loans?
Adam: Federal loans not held by the Deptartment of Education – such as FFEL-program federal loans held by private lenders or guaranty agencies, and federal Perkins loans held by colleges and universities – are not covered. Private student loans are also not covered. Borrowers with these loans would need to contact their lender or servicer to see if any other relief is being offered.
Joyce: How can someone check to ensure their loan is covered by the CARES act? What documentation should they keep if they contact customer service for their loan processor?
Adam: Borrowers can contact their loan servicer for more information. Borrowers can also get more details on their federal student loans through the Deptartment of Education’s web portal at studentaid.gov.
Joyce: How will this CARES act relief affect those enrolled in the Public Service Loan Forgiveness Program?
Adam: The months of suspended payments would still count towards loan forgiveness programs, including Public Service Loan Forgiveness, even if no payments are made, according to the Deptartment of Education.
Joyce: Is there a benefit for someone to keep paying their loans during this time even if they are in automatic forbearance?
Adam: Since no interest accrues during the forbearance period, any payments made would be more effective in paying down the loan balance.
Joyce: Students and their families are already looking ahead to the fall 2020 semester. Will federal student financial aid (including new loans) be affected if classes continue to be held remotely?
Adam: That is unclear at this time.
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