How Does The Coronavirus Student Loan Interest Break Work?
Saturday, March 14, 2020
As part of a coronavirus COVID-19 federal aid package, the interest on federal students loans will be waived automatically and will continue until the temporary policy is lifted.
The interest break en college loans will be put into effect around the next week, retroactive back to Friday's announcement.
People from all corners of the political spectrum, including congressman, union leaders, and consumer advocates have been calling for some sort of student loan relief for borrowers as the coronavirus pandemic unfolds, but nothing was announced until President Trump’s Friday’s spoke at the White House’s Rose Garden.
As expected, President Trump was somehow vague and provided no details in terms of who would benefit from the student loan interest break, which student loans would qualify for it, or whether student loan borrowers would need to take some action to access the interest freeze. It still remains unclear if federal Parent PLUS loans would qualify or not.
It’s also unclear whether private student loans would be included in the interest waive.
President Trump’s administration didn’t say a word about any other potential relief for student loan borrowers, such as a pause on student loan payments or a halt on student loan collectors.
It seemed at first that student loan borrowers should contact their loan services to determine whether monthly payments are still due, but then a President Trump spokesperson indicated that the interest deduction will occur automatically and will continue until the temporary policy is lifted.
According to the Department of Education, under the new policy, any borrower with a federal loan will have the interest portion waived automatically until the temporary student loan interest break policy ends.
The spokesperson added that the Department of Education does not know exactly how long the policy will be in effect.
The interest will be waived automatically, the spokesperson said, and the policy will be put into effect over approximately the next week, retroactive back to Friday's announcement by the President.