Until September 30, 2020, there is an automatic payment suspension for any student loan held by the federal government. Interest is frozen for that period as well. But, borrowers should check to make sure their servicers have reset their billing systems. An estimated 95-percent of borrowers have federal loans.
The U.S. Department of Education will stop all requests to the U.S. Treasury to seize tax refunds, paychecks, or Social Security benefits on federal student loans in default. It will not transfer any new accounts to its private debt collectors through September 30 as well. And, the Department of Education is returning $1.8 billion to more than 830,000 defaulted borrowers whose money was withheld on or after March 13, the day President Donald Trump declared a national emergency.
Several private lenders are also offering help. Some banks are allowing borrowers to extend their payments or postpone them without accruing interest for two months. Other banks are waiving late fees and offering forbearance for three months. Sallie Mae is offering a 3-month suspension of payments. And, Wells Fargo is providing a 90-day payment deferral.
