Graduating Class

Federal Student Loan Payments Suspended

2020-03-23T21:31:15+00:00

On March 20, U.S. Secretary of Education Betsy DeVos announced that borrowers with federally issued student loans will receive temporary relief relative to their payments due to the COVID-19 national emergency. Relief applies only to federal loans, not loans granted by an educational institution or commercial lender.

Borrowers with federally held student loans will have the option to suspend payments for at least two months without accruing additional interest, as interest rates have been set to 0% for at least those 60 days. Borrowers can request this forbearance by contacting their loan servicer online or via telephone. Additionally, an automatic suspension has been granted to borrowers more than 31 days delinquent as of March 13, 2020, or who become more than 31 days delinquent after March 13.

Borrowers who continue to make payments will not see their payment amount decline, but their full payment will be applied to the principal, once interest accrued for the time prior to March 13 is paid. Those seeking Public Service Loan Forgiveness or who have enrolled in a repayment plan should consider continuing payments or at least seeking more information from their loan servicer to ensure they are not violating the terms of their program.

Those who have experienced a decrease in their income for any reason should contact their loan servicer to learn of any opportunities to lower their payments.

For more information, visit these resources from the U.S. Department of Education:

 

If you have questions or would like to discuss COVID-19’s effect on you or your business, contact a member of the HBK CPAs & Consultants team.

About the Author(s)
Amy Reynallt is a Manager with the HBK Manufacturing Solutions Group in the Youngstown, Ohio office of HBK CPAs & Consultants. She joined the firm in 2019 following 13 years in the manufacturing industry. Amy is experienced in navigating the strategic and financial matters associated with manufacturing and works closely with manufacturers to help them plan, execute, and meet their short- and long-term financial goals.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

RECOMMENDED ARTICLES