The student loan details of the $2 trillion stimulus package have been released and they are game-changing, so without further adieu:
- Interest AND payments are being suspended on all federal student loans for SIX MONTHS, through Sept 30th.
- The suspension of payments and halting of interest accrual will be automatic; nothing you need to do.
- Those enrolled in Income-Driven plans will be able to count this six month period towards available loan forgiveness… including PSLF, assuming they are meeting the employment requirements.
- Anyone pursuing PSLF is advised to simply enjoy the payment holiday, as making unnecessary payments would only increase the cost of forgiveness.
- If you are graduating this spring, we need to get some guidance from the Dept of Ed before advising you. It may be advisable to take action soon after you graduate to maximize benefits. Interest is halted as of 3/13 in the interim.
- If you’re in Standard, Extended or Consolidated repayment, your payments will also be halted. You may still make elective payments which will go 100% to principal. (You’re likely a refinancing candidate if this is the case; please contact us to explore this marketplace while rates remain at record lows.)
- FFEL loans and private loans (including those that have been refinanced) do NOT qualify for the stimulus. I am in discussions with our partners about possible matching benefits.
The stimulus still needs to pass the House, but it is expected to do so, and Trump has already indicated he will sign it.