Secretary DeVos extends student loan deferral

The US Secretary of Education Betsy DeVos announced the extension of the administrative deferral period for student loans, the interruption of accrued interest and the suspension of debt collection activities until January 31, 2021. Federal student loan borrowers are not expected to make payments until January of next year, although they will continue to do so and benefit from the 0 percent interest rate while they pay off the principal. Non-payments will continue to count towards the number of payments required under an income-based repayment plan, loan restructuring arrangement, or public service lending program.

“The coronavirus pandemic has challenged many students and borrowers, and this temporary break in payments will help those affected,” said Minister DeVos. “The extra time also allows Congress to do its job and determine what action it deems necessary and appropriate. Congress, not the executive, is responsible for student loan policy. “

The FSA is now working with federal student loan service providers to inform borrowers that current relief efforts will continue through January. In March 2020, Minister DeVos instructed employers to stop garnishing wages for borrowers with defaulted federal student loans. That statement remains in place, and all defaulted borrowers whose wages continue to be garnished will receive refunds.

After President Trump declared a national emergency due to the COVID-19 pandemic on March 13, Secretary DeVos immediately used her powers under the HEROES Act of 2003 to zero all federal student loan rates and automatically give borrowers administrative leniency to defer payments without a fine. On August 21, Secretary of State DeVos complied with President Trump’s August 8 memorandum on federal student loan facilitation by extending CARES borrowing benefits through December 31.

The department continues to update ed.gov/coronavirus with information about COVID-19 for students, parents, educators, and local leaders.

About Alexander Estrada

Check Also

How to get a quick loan in an emergency – here are five options

Representative picture New Delhi: Although an emergency or unexpected circumstance can arise at any time, …

Leave a Reply

Your email address will not be published.