Coronavirus Impact on College Financial Aid: Student Loan Forbearance
The coronavirus has impacted all facets of life, and college financial aid is no different. One specific area of college financial aid impacted has been the Federal Direct student loans.
For these Federal student loans, there is a temporary forbearance, meaning payments aren’t required, and there is 0% interest on the loans. At this time, the deadline is set for the end of 2020. Of course, as we’ve seen with other aid programs during this time, this deadline could be extended into 2021.
Initially, this program was set to expire in September, but in August it was extended through the end of the year via the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). As part of this program, the Office of Federal Student Aid has:
- Suspended loan payments
- Stopped collections on defaulted loans
- Set interest rates to 0% through the end of 2020
You can find additional information on this program at StudentAid.gov’s website.
Of course, this program impacts current borrowers, but there could certainly be impacts to those in the future in terms of Federal student loans as well. In the coming weeks, we’ll continue to provide ways that the coronavirus is impacting college financial aid for those that are not only attending or have attended college recently but also those who are planning to start college next fall or in upcoming years.