Federal Student Loans Eligible for Administrative Forbearance
Effective March 27, 2020, under the CARES ACT, federal student loans owned by the Department of Education were placed in an administrative forbearance through 9.30.20. Additionally, the Department of Education has issued a 0% interest rate during this time frame for the following loans:
- Defaulted and non-defaulted Direct Loans
- Defaulted and non-defaulted FFEL Program loans
- Federal Perkins Loans
(It is important to note, however, that not all of the above loans automatically qualify for the forbearance, such as loans made under the FFEL program. If the loan is not actually owned by the Department of Education [it may be owned by a commercial lender or the institution in which you attended] you may not be automatically placed into a forbearance. All loans owned by the Department of Education, however, will qualify for the 0% forbearance). Contact your loan servicer or log in to your online portal to get information regarding your particular accounts.
Borrowers may voluntarily make payments during this time, which will be applied to principal once the interest accumulated prior to March 13, 2020 is satisfied. For those borrowers who have questions concerning whether their anticipated tax refund will be offset, it is best to contact your servicer.
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Unfortunately, at the time of this writing, private student loans have not received any type of similar break under the CARES Act, or other governmental relief benefit, as a result of the Coronavirus Covid-19. In other words, your private student loan payments most likely remain due and you remain at risk for default or other adverse action. For both private and federal student loans, you may want to contact your servicer to determine your specific status, and therefore obligations, concerning your loans.
If you find yourself in need of financial assistance concerning your student loans, please contact our student loan law firm for a free phone evaluation. It is important to note that private student loans and federal student loans are addressed, navigated and eventually resolved, very differently. It may behoove one to have a professional review the full spectrum of your loans prior to determining the best strategy in moving forward.
Call the Law Office of Simon Goldenberg, PLLC at (888) 301-0584 for a free student loan debt relief evaluation.