Anyone have info Covid forbearance for Direct Loans?
My DD got an email from her loan services saying her loans are in Covid forbearance until 2021 sometime. Is this really true? She has $0 in interest accruing for professional school, and no payments due for anything for a while?
She does intend to make payments anyway…but I would love an explanation of this Covid forbearance.
Did I miss a thread about this?
The link below may be helpful.
@BelknapPoint thank you for the link.
She really thinks her professional school payments won’t begin in 2020 at all.
I’m sure her loan services will bill her when the time comes to make payments!
And she does plan to pay anyway especially on the undergrad loans where we already paid off the interest…so it will go directly to principal.
@thumper1 If it is COVID-19 related:
"Your payments will automatically stop from March 13, 2020, through Sept. 30, 2020.
To provide relief to student loan borrowers during the COVID-19 national emergency, federal student loan borrowers are automatically being placed in an administrative forbearance, which allows you to temporarily stop making your monthly loan payment. This suspension of payments will last until Sept. 30, 2020, but you can still make payments if you choose."
Federal loans are in automatic forbearance through September 30, 2020. Payments are not due, but interest continues to accrue as usual. Here is a good link: https://studentaid.gov/announcements-events/coronavirus.
Note that some Perkins and HEAL loans may not be in automatic forbearance. Borrowers should check with their servicer.
I thought the interest was not accruing right now either.
Ah, I missed that update.
My daughter’s direct loans are in forbearance and 0%. She thought that applied to her Perkins loan too, didn’t pay it, and got a late charge. She’s paying it now but her servicer said the college has to agree. Above says the Perkins should be at 0% too. I’m going to have her call the college and try to get that late charge backed off.
I don’t think they are being very fair to kids at all.
The good news is the interest rate for direct loans for 2020-21 is 2.75%
There is a caveat about Perkins loans not necessarily being part of the CARES Act relief. The reason is that the loans are funded initially by federal funds, but they are the school’s responsibility (the debt is owned by the school) once disbursed. If you look at the link in my post, you’ll see that only Perkins loans owned by the federal government automatically fall under the rules. Frankly, the only Perkins loans I can think of that would be federally owned would be those that were consolidated into a federal loan (and then technically, the underlying Perkins loan has been paid off by the consolidation loan).