Update: On December 4, 2020, Federal Student Aid announced Federal Direct student loans will not resume repayment until after January 31. 2021.
By: Tori Berube, MFF Marketing & Outreach
Federal Direct student loans are loans made to student or parent borrowers on behalf of the US Department of Education (ED) and Federal Student Aid (FSA) for loans made on or after July 1, 2010.
In response to COVID-19, on March 20, 2020, the Secretary of Education directed the office of Federal Student Aid to temporarily suspend loan payments and to set the interest rate to 0% these student loans as a way to help struggling borrowers as the pandemic began to negatively affect the personal finances of many borrowers.
These loans are currently scheduled to resume repayment in January 2021. If you have these loans, your loan servicer (the company you pay each month) will notify you shortly your repayment is about to begin. This communication may be electronic or may be mailed to you, so be on the watch for any notification.
If you also have private student loans, many of these loan servicers have also suspended payments through the end of December and you may also receive notification from them your loans are about to enter repayment again.
If you are unable to make your payments when your loans do enter repayment again, it is important know there are options to help you manage your payments. Contact your loan servicer(s) immediately to identify what options may be available to you to postpone or reduce your payments until you are able to resume them. This may mean asking about an economic or unemployment deferment or identifying a different repayment plan to help you manage the repayment process.
A Journey to Personal Financial Success
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