Federal Student Loan ReliefSubmitted by Kaizen Financial Advisors, LLC on July 3rd, 2020
Are you or someone you know currently making federal student loan payments? In light of the
COVID-19 pandemic, some welcome relief has been implemented for federal student loan payments.
Thanks to the recent passage of the CARES Act, the U.S. Department of Education has allowed
you to temporarily halt your federal student loan payments from March 13, 2020 until September 30, 2020.1
What should you do next?
Currently, no action is necessary. As part of this relief initiative, all federal student loans will be
placed in an administrative forbearance and automatic payments will be paused from March 13
to September 30, 2020.
What about the interest?
Good news! During this same period, interest rates are being set to 0% on the following types
of federal student loans:2
- Defaulted and non-defaulted Direct Loans
- Defaulted and non-defaulted FFEL Program loans
- Federal Perkins Loans
What if I want to keep making payments?
It is important to keep in mind that payments are still being accepted during this time period,
but they won’t be automatic or required. Depending on your situation and goals, continuing to
pay down your federal student loans may make sense, even during this challenging time.
If you would like to discuss a strategy for your federal loan payments, or have any other
financial related questions, please contact a Kaizen Advisor