COVID-19 Student Loans

COVID-19 Legislation-Individuals

Student Loans

Some relief is available for federal student loan borrowers. Most provisions apply only to Direct Loans and Federal Family Education Loans (FFEL) that are currently owned by

the U.S. Department of Education. FFELs owned by commercial lenders and Perkins loans owned by your educational institution are not eligible.

Payment suspension: All payments due for eligible federal student loans are suspended until September 30, 2020. Each month of suspension will count toward a loan payment for the purpose of any loan forgiveness program or loan rehabilitation program. This means suspended payments are considered qualifying payments for income-based repayment, Public Service Loan Forgiveness, or defaulted loans enrolled in a rehabilitation program.

Interest waiver: During the period of payment suspension, no interest will accrue. For eligible federal student loans, the interest rate is 0% until September 30, 2020.

Collections: During the period of payment suspension,

wage garnishments, refund offsets, federal benefit reductions, or any other involuntary collection activity are also suspended.

Employer educational assistance: If your employer provides educational assistance fringe benefits, up to $5,250 may be excluded from taxable income for employer payments to your student loan from March 27, 2020 through December 31, 2020. The $5,250 limit applies to student loan payments and tuition assistance payments combined. You cannot claim a student loan interest deduction for employer-paid interest.

For more information, go to US Dept. of the Treasury: Personal Finance and Consumer Protection page.

https://home.treasury.gov/policy-issues/consumer-policy/personal-finance-and-consumer-protection-steps-for-quicker-financial-relief