The Coronavirus (Covid-19), has put the country in a state of economic turbulence as more and more Americans are losing their jobs or facing that very real possibility. These uncertain times have made it necessary for Americans to put some of their monthly bills on the back burner, including Federal student loan payments.
Realizing the gravity of the current situation, Congress passed the CARES Act, a Coronavirus relief bill on Friday, March 27, 2020, that requires all lenders to stop all payments for student loans that are federally held through September 30, 2020. No interest will accrue on those loans, wage garnishment, Social Security reductions, or tax refund reductions for those that have defaulted on their loans will not apply, nonpayment of those loans will not affect the borrower’s credit score, or their ability to qualify for loan forgiveness.
The government has 15 days from President Trump signing the bill, which occurred on Friday, to notify qualifying borrowers that their Federal loan payments are temporarily suspended. Beginning August 1, 2020, loan lenders will be required to notify borrowers that their loan payments will resume at the end of September with a minimum of six notices.
Over the next six months, borrowers are permitted and encouraged to continue paying down on the principal of their loans and the Department of Education has set the Federal student loan interest rate at 0% beginning March 20, 2020, which will continue for six months. However, borrowers are not required to do so if they are unable.
The Federal student loan suspension will take effect immediately but will not affect private student loans, borrowers with Perkins, or commercially held Federal Family Education Loans which make up approximately 12% of all education loans for over 1.2 million borrowers.
The proposed legislation would have gone further in requiring the Department of Education to make monthly payments for all Federal student loan borrowers during the pandemic for a minimum of $10,000 per loan; if total monthly loan payments would not reach $10,000 by the end of the Coronavirus emergency, the Department would then have been required to pay the remaining of the loan’s balance. With the Senate in recess until April 20 and the House not releasing a date to reconvene, this provision will likely not pass, for the time being, however, representatives from both chambers have stated that further Coronavirus relief legislation should be passed in the future as the situation continues to develop.
If you or a loved one has questions regarding your legal rights during this extremely difficult time, the lawyers at America’s Consumer Lawyer can help.
Helping our clients is about counseling, advocating, and ultimately solving problems. With years of experience successfully representing the people, not the powerful, we will take care of the insurance adjusters, your medical bills, your property damage, and your lost wages, and monitor your treatment so you can focus on healing and getting your life back to normal. Our unique formula has earned us over 1,000 outstanding client reviews on our website, an A+ BBB rating, and over 135 five-star reviews on Google. Call 888-572-0176, e-mail us at michael@agrusslawfirm.com or schedule a meeting with us here. We’re here 24/7.
