Federal government suspends student loan payments for 60 days
WASHINGTON — Due to economic uncertainty around the novel coronavirus (COVID-19) outbreak, President Donald Trump and Education Secretary Betsy DeVos announced today that the Education Department would allow federal student loan borrowers to forgo payments for 60 days without penalty. However, to take advantage of this offer, borrowers need to contact their loan servicers, and not all borrowers will be able to remain in good standing if they take advantage of this repayment freeze.
Kaitlyn Vitez, U.S. PIRG Higher Education Campaign director, issued the following statement in response:
“While we applaud the president and secretary for offering much-needed relief to Americans in this public health crisis, their proposal to freeze student loans for two months does not go far enough — and could keep already-stressed borrowers in a place of economic uncertainty.
“Under the proposal, student loan borrowers would need to take action to get the freeze on payments. Given the fact that at least one major servicer has closed its call center and others are experiencing a surge in customer service requests, this could make it hard for borrowers to succeed in getting relief.
“In order to better provide relief to borrowers, student loan payment cancellations should be:
- Automatic: Borrowers should not need to opt in to get the freeze on payments put in place.
- Universal: Borrowers in income-driven repayment plans, particularly those on track for Public Service Loan Forgiveness, should be able to count each month of federally-frozen payments as a ‘qualifying payment’ to keep themselves in good standing. Borrowers should get relief no matter which federal repayment program they are in.
- Tied to the length of the pandemic: We need to offer borrowers the means to pay the bills, and be able to afford to stay at home. In order for social distancing to work, we need to give every American the resources they need to stay at home and stay healthy.”