Federal Student Loan Relief: Payments Suspended, Interest Waived

WASHINGTON, D.C. — In response to the economic challenges posed by the COVID-19 pandemic, U.S. Secretary of Education Betsy DeVos has implemented significant relief measures for federal student loan borrowers. These actions are in line with President Donald J. Trump's promise to provide financial assistance during this unprecedented national emergency.

The Department of Education announced that interest rates for all federally held student loans will be set to 0% for a minimum of 60 days, starting March 13, 2020. Furthermore, borrowers will have the option to suspend their loan payments for at least two months, offering much-needed flexibility to millions of Americans facing financial uncertainties. This temporary suspension also ensures that no additional interest will accrue on their balances during the forbearance period.

Key Details of the Relief Program

1. Interest Waiver: Borrowers with federally held student loans will benefit from a 0% interest rate, providing immediate financial relief.
2. Optional Payment Suspension: Borrowers can request an administrative forbearance, pausing payments for at least 60 days without penalty.
3. Automatic Suspension for Delinquent Borrowers: Those more than 31 days delinquent as of March 13, 2020, or who become delinquent after that date, will have their payments automatically suspended.

To take advantage of the forbearance, borrowers should contact their loan servicer online or by phone. Those who wish to continue payments - such as individuals pursuing Public Service Loan Forgiveness (PSLF) or those in manageable repayment plans—can do so. Payments made during the 0% interest period will directly reduce the loan’s principal balance after covering any previously accrued interest.

Secretary DeVos’s Statement

“These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted,” said Secretary DeVos. “Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing. I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.”

Flexibility for Borrowers

Borrowers experiencing income changes can also explore adjusting their repayment plans to lower their monthly payments. The Department of Education is working closely with Congress to ensure support extends to all borrowers, including those in income-driven repayment programs.

Interesting Facts about Federal Student Loan Relief During Emergencies

• This initiative marked one of the largest-scale interventions for federal student loan borrowers in U.S. history, benefiting tens of millions of Americans.
• The measures were implemented as part of a broader strategy to alleviate financial stress during the COVID-19 pandemic, including economic stimulus checks and enhanced unemployment benefits.
• The relief not only provided immediate aid but also allowed borrowers to focus on other essential expenses like housing, food, and healthcare during the emergency.

Additional Resources

Borrowers seeking more information can visit StudentAid.gov/coronavirus for detailed guidelines and updates. For a broader overview of how the Department of Education is responding to the COVID-19 crisis, visit ed.gov/coronavirus.

This program underscores the federal government’s commitment to supporting students and families during challenging times, providing not just financial relief but also peace of mind to millions of Americans.