Student loan borrowers with the Federal Family Education Loan (FFEL) Program or Federal Perkins loans not owned by the Education Department don’t have access to the automatic forbearance. Relief for student borrowers had been scheduled to expire at the end of the year. Since the January payment due date can vary, you’ll want to contact your servicer yourself if you haven’t received a phone call, email or letter from your servicer prior to the end of the year. This compensation comes from two main sources. It’s unclear if the new Biden administration will authorize further extensions. But President Trump in August ordered the U.S. Department of Education to continue freezing payments and prevent interest from accruing through Dec. 31. Your servicer’s online customer service portal may have copies of any communication sent to you. However, the government did manage to bring in some forms of financial aid. Forbes adheres to strict editorial integrity standards. But many already benefited from some unprecedented events in 2020:— An administrative forbearance … Here are some answers to common questions about what happens when student loan borrowers once again have to begin making payments. Federal student loan borrowers will not be expected to make payments through January of next year, though they will continue to be able to do so and benefit from the 0% interest rate as they pay down principal. While a one-month extension wasn’t the Christmas miracle many were hoping for, it gives lawmakers time to agree on the next stimulus package or for the new administration to pass loan forgiveness. The Department continues to update ed.gov/coronavirus with information on COVID-19 for students, parents, educators, and local leaders. User account menu. Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. As long you were still working full-time for a qualified public service employer during the automatic forbearance, you basically got a break. Continue Reading Below On Friday, the U.S. Department of Education extended the student loan forbearance break, which Congress authorized in the wake of the coronavirus pandemic, through the end of January 2021. While you don’t want to count on an extension until it happens, you should monitor the Department of Education website for program changes. Press J to jump to the feed. Keeping up to date on communication with lenders may help borrowers stay on top of any necessary payments or paperwork, if or when the laws or orders affecting student loans change. Upon President Trump's March 13, 2020, declaration of a national emergency resulting from the COVID-19 pandemic, Secretary DeVos immediately used her authority under the HEROES Act of 2003 to set all federal student loan interest rates to zero and automatically enter borrowers into administrative forbearance, allowing them to defer payments without financial penalty. If you opened a new bank account during forbearance, you should contact your servicer to change your direct debit information. Since we have a long way to go to get back to the employment levels we had before the COVID crisis, I think forbearance plans will be extended fully in 2021. Are you sure you want to rest your choices? On Monday, Congress approved a second coronavirus relief package that includes $600 stimulus checks for many individuals — but no additional student loan forbearance for borrowers.. Back in March, the CARES Act paused federal student loan payments and interest, giving many borrowers a break. Student loan forbearance period extended through January ... 2021. Secretary of Education Betsy DeVos extended the federal government’s moratorium on mandatory federal student loan payments, postponing the deadline for the third time since Congress passed the first major COVID-19 relief package back in late March. Anonymous. If you don’t need the extension because you have returned to work and don’t qualify for student loan forgiveness, you may want to make payments regardless. FSA is now working with federal student loan servicers to notify borrowers that the current relief measures will continue until the end of January. 59 votes, 15 comments. If your contact information isn’t up-to-date, you should contact your servicer or log in to your account prior to the end of the year and make sure all information is still accurate. ... than $900 billion — and they’re anxious to learn if the relief will continue into 2021. If you consolidated your federal loans into one loan with one payment, your loans still operate by the rules of the automatic forbearance. One important example is the student loan forbearance period, which Congress initially allowed through September 30. Student Loan Forbearance. © 2020 Forbes Media LLC. If you lost your job during automatic forbearance, you will no longer receive credits for payment beginning from the date you became unemployed. If you have federal student loans, your payment reprieve has just been extended. You will receive credit toward your required 120 on-time payments as long as you were not in school, in a grace period, in deferment or in another type of forbearance during the automatic forbearance period. Your federal student loan payments are expected to resume in … Our mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. 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