Loan payment

Suspension of student loan repayments extended until January 31

Borrowers have not had to make payments since March, but the relief was due to expire on December 31. DeVos also extended the pause on interest accrual, as well as the suspension of collections on defaulted loans.

In an unprecedented move, President Donald Trump initially waived interest on student loans in March as large parts of the economy began to shut down in response to the coronavirus pandemic.

A broader version of student loan relief was included in the $2 trillion economic stimulus package signed two weeks later. Under this program, the US government has automatically suspended payments and waived interest on federal student loans until September. Trump then moved the expiration date to the end of the year through executive action.

Congress has yet to approve more pandemic aid despite months-long negotiations over another sweeping stimulus package, but lawmakers are closing in on a deal. A bipartisan proposal unveiled earlier this week included a provision to continue the pause on student loan repayments. But the negotiators still have a lot of work to do and the deadline is fast approaching. It is still possible that Congress will extend the relief beyond January 31. President-elect Joe Biden could also push back the deadline with executive action.

The interest suspension and relief only applies to loans held by the federal government. This covers approximately 85% of all federal student loans, including those known as direct federal loans and PLUS loans that parents can take out on behalf of their children.

It excludes certain federal loans that are guaranteed by the government but technically not owned by it. Generally, these were disbursed before 2010.

Although borrowers do not have to make any payments until January 31, they will still be able to do so and benefit from the 0% interest rate.

Individuals enrolled in the Public Service Loan Repayment Plan will still receive credit for the rebate program as if they had continued to pay, as long as they are still working full-time for eligible employers.