SPOKANE, Wash — In March, President Trump announced he'd be ordering some form of student loan relief. Exactly what kind was unclear.
Congress made it more clear when they passed the stimulus package. Here’s a breakdown of what it does, and who is eligible.
What it does
For certain loans, everyone is automatically put into forbearance until the end of September. Not only that, but all interest on those loans is waived through that end date, September 30. That means those borrowers won't have to pay anything at all on those loans until mid-fall.
Now, let's say you're on an auto-debit payment plan. Do you need to cancel it? No, providers are supposed to automatically take you off auto-debit until the forbearance ends.
But, let's say you're doing fine financially and want to keep making payments. Can you still do that? You can. There are two ways.
One, ask your provider to put you back on auto-debit. Two, just go in and make whatever manual payments you want, whenever you want.
There is a benefit to continuing to make payments during the automatic forbearance. Since there's no interest right now, all your money will go straight to paying down your actual principal debt. So, you could end up actually paying off your loan faster.
In addition, the forbearance is backdated to March 13th. That means if you did make a payment after March 13th, you can ask you servicer for a refund if you like.
Which loans are eligible?
It’s important to note that these policies apply only to loans owned by the federal government itself.
For most people, that means subsidized or unsubsidized Direct Loans held by the U.S. Department of Education.
Some FFEL (Federal Family Education Loan) or Perkins loans could be eligible, but many are held by commercial lenders or by schools themselves, so you might need to check with your lender.