Student Loan Interest Forgiveness Still Unclear in Coronavirus Relief Package Announced by President Trump
Friday, March 13, 2020
President Trump announced he will waive interest on federally held student loans as part of his emergency coronavirus response. The intent is to offer relief to students, but no one really knows how it translates to loan-holder students.
President Trump announced he will waive interest on federally held student loans as part of his emergency coronavirus response to offer relief to students, many of whom are dealing with closed college campuses because of the global coronavirus COVID-19 pandemic.
"I've waived interest on all student loans held by federal government agencies until further notice. That’s a big thing," said Trump as he declared a national emergency over the coronavirus. "That's a big thing for a lot of students that are left in the middle right now. Many of those schools have been closed."
So, what does it mean for you if you are a student loan holder?
Does it mean you can stop payments and no interest will be added later? Does it mean that you still have to make your payments, but the interest portion will be subtracted?
No one really knows yet.
Earlier this week, Democrats had pushed Trump for a broader six-month loan-forgiveness plan for people with student debt.
Treasury Secretary Steven Mnuchin said earlier Friday that the government would consider suspending student-loan payments altogether, but Trump stopped short of the more drastic action.
And then President Trump made the announcement. Just in case it was not clear, Secretary of Education Betsy DeVos said "The president has waived interest payments, but not principal payments, on federally-held student loans until further notice."
So, dont re-budget yet.
The details of Friday's announcement have not been unveiled. Trump's announcement came as he declared a national emergency in response to the spread of COVID-19.