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Coronavirus response: Student loans allowed pause for 60 days
President Trump introduced a short lived waive on curiosity for federally held student loans for as much as 60 days.
WASHINGTON — Borrowers with federal student loans will be capable of pause their funds for 2 months with out curiosity accruing, President Donald Trump and the Education Department mentioned Friday.
The transfer is an effort to assist these financially affected by the unfold of the coronavirus. Trump had introduced final week the federal government would waive curiosity on federally held loans final week, however few particulars had been out there. The suspension will probably be in impact for not less than 60 days, and it began on March 13.
“Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing,” mentioned Education Secretary Betsy DeVos in a information launch. “I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.”
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Borrowers should contact their loan servicers to request the pause in funds. It’s unclear how shortly these businesses will be capable of reply to these requests.
Those who still want to make their payments can do so. The payment in that case would be applied directly to the principal balance, which may allow some borrowers to pay off their loan more quickly. Those in the Public Service Loan Forgiveness program who have to make 120 payments before their loan is forgiven may also be interested in continuing to make payments, the release said.
The department also authorized suspension of automatic payments for borrowers more than 31 days delinquent as of March 13, or anyone who becomes 31 days delinquent.
Pausing loan payments is one of the many financial measures lawmakers have considered to ease the financial burden caused by the coronavirus. Some Senate Democrats have proposed that the Education Department be authorized to make payments on borrowers’ loans. Senate Majority Leader Mitch McConnell’s plan called for a pause for three months and would give DeVos the ability to suspend payments for an additional three months on top of that.
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