(UPDATED MARCH 27, 2020)
President Donald Trump has stopped collecting federal student loan debt.
Here’s what you need to know.
As first reported by Politics, the Trump administration has stopped collecting from borrowers who have defaulted on their federal student loans. This reprieve could impact 9 million student loan borrowers currently in default amid the coronavirus emergency. Education Secretary Betsy DeVos, according to Politics, informed the private collection companies of “Stop calling borrowers, sending collection notices, or taking action to seize part of their paychecks. The restrictions will be retroactive to March 13 and will last until further notice. The Education Department also plans to stop the referral of overdue student loan accounts to the Treasury Department for wage garnishment, tax refunds and Social Security payments (which are known as name of “offsets”). DeVos ordered the Treasury Department to repay about $ 1.8 billion in compensation to more than 830,000 student loan borrowers.
Student loan repayment
Since the coronavirus outbreak, borrowers have been looking for ways to reduce their monthly student loan payments. Following Trump’s executive action, new congressional legislation – known as the CARES Act – would grant several benefits to help student loan borrowers manage their money due to the coronavirus emergency. Current benefits would include:
Help borrowers with student loans
Student loan borrowers want to know what to do with their student loans due to the coronavirus.
These reactive measures come amid congressional proposals to help provide financial relief to student loan borrowers. For example, House Democrats proposed that each borrower receive $ 30,000 in student loan forgiveness. Senate Democrats unveiled a student loan forgiveness plan that would write off at least $ 10,000 in federal student loans for all borrowers. Former vice-president Joe Biden takes charge of $ 10,000 for student loan cancellations.
Meanwhile, Trump has taken several steps to help student loan borrowers. Trump temporarily waived all interest on federal student loans for 60 days. Interest relief is automatic, so you don’t need to register with your student loan manager. Trump also announced that borrowers can stop paying federal student loans for 60 days. If you want to know how to suspend your federal student loan payments for 60 days without any penalty, you can contact your federal student loans manager to request an administrative abstention. However, you do not have to suspend the repayment of the student loan for 60 days; it is completely optional.
Remember, this announcement only applies to federal student loans (not private student loans). If you want to know how to pay off your student loans, start here because all of these options are free: