Summary of Coronavirus Aid, Relief, and Economic Security (CARES) Act Sec. 3513. Temporary relief for federal student loan borrowers

TEMPORARY RELIEF FOR FEDERAL STUDENT LOAN BORROWERS

1. Payments on all Direct Loans and federally-held FFELP loans were automatically suspended under the CARES Act through September 30, 2020. The suspension was later extended to December 31, 2020 by Presidential Memorandum, administered by the Department of Education.
2. Payments on all commercially-held FFELP and Perkins loans were suspended until September 30, 2020. The extension of the suspension of payments may be extended until December 31, but has not yet been clarified. Check with your Servicer to determine whether they are continuing the suspension until further guidance is issued.
3. Interest will not accrue on Direct Loans and federally-held FFELP loans during this time (through September 30, 2020 and now extended through December 31, 2020).
4. Suspended payments through the extension will count as payments toward forgiveness programs such as PSLF and income-driven repayment for borrowers that otherwise qualify.
5. Suspended payments through the extension will count as payments toward federal loan rehabilitation programs for borrowers that otherwise qualify.
6. Suspended payments through the extension will be treated as regular payments made by the borrower for the purposes of reporting to credit reporting agencies.
7. During this period, the federal government will suspend involuntary collections on Direct Loans and federally-held FFELP loans. The suspended actions include:

   a. Wage garnishment

   b. Reduction of tax refunds

   c. Reduction of any other Federal benefit payment (e.g., Social Security)

   d. Any other involuntary collection activity by the U.S. Department of Education

8. The U.S. Department notified impacted borrowers within 15 days of the CARES Act being enacted, that:

   a. Their payments have been suspended and interest has been waived,

   b. Involuntary collections have been suspended,

   c. They may continue to make payments toward the principal of their loan, and

   d. The suspension activities are temporary.

9. The U.S. Department of Education will send communications (by postal mail, telephone, or electronic communication) to borrowers before December 31 letting them know:

   a. when their normal payment obligations will resume; and

   b. that the borrower has the option to enroll in income-driven repayment.