Original article on presbyterianmission.org
PC(USA)’s Financial Aid for Service: Payments on eligible federal student loans are suspended through Sept. 30
by Paul Seebeck | Presbyterian News Service
LOUISVILLE — New resources from the Presbyterian Mission Agency’s Financial Aid for Service provide guidance on how to manage one’s student loans, now that the Coronavirus Aid, Relief and Economic Security Act (CARES) has been signed into law by President Donald Trump.
Melonee Tubb, associate for FAF, said what people need to know right away is that they could be “off the hook’” for their federal student loan debt through Sept. 30. The new law automatically suspends payments on eligible loans for six months, with no interest accrued.
By law, lenders have until Easter weekend to alert borrowers that their payments have been suspended.
Under the CARES legislation, loans made under the Federal Direct Loan Program that are eligible for suspended payments include Direct, Subsidized, Unsubsidized, PLUS, and Consolidation loans. Payments for loans acquired through the Federal Family Education Loan Program (FFELP), transferred to the Department of Education, are also eligible.
Tubb said people with a FFELP loan should check immediately because those loans managed by a private bank or institution aren’t eligible for automatic suspension. Federal Perkins Loans managed by universities and any private loans are also not eligible under the CARES ACT.
“If you are having trouble making payments and have one of these ineligible loans, call your servicer immediately,” she said. “Some servicers are offering additional emergency deferment or forbearance options.”
The bottom line: Tubb encourages those with student debt to contact their servicer to find out more about how the new law will impact them. For example, Tubb said anyone working towards public service loan forgiveness (PSLF) or loan rehabilitation will get additional relief under the CARES legislation.
“Their suspended payments will be treated as if the borrower made the payments and count toward the 120 payments necessary for forgiveness,” she said.
Additional information on how the CARES Act might impact your federal student loans and tips on how to manage student loan debt during emergencies can be downloaded here.
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