Student Loan Payment Suspension and Interest Waiver Update | The Art and Science of Successful Planning

Back-to-School Update: Federal Student Loans

This month, many universities and colleges are welcoming students back to campus, even though most classes remain largely online.

But that’s not all that’s different. The current administration has issued an executive memorandum that extends the temporary halt on all federal student loan payments, which was originally granted by the CARES Act, until December 31, 2020. This executive action instructs the Department of Education to “continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education.”¹

What about the interest?

As stated above, this most recent executive action extends the 0% interest on the following types of federal student loans.¹

Direct Loans
FFEL Program loans
Perkins Loans

For guidance on managing finances during uncertain times, including the impact of COVID-19 on personal finances and investments, consider reviewing our articles on COVID-19 market impact and financial planning for retirement.

What Should You Do Next?

For now, you don’t need to take any action. However, with back-to-school season underway, this is a good reminder of the change for federal borrowers.

If you have questions about leveraging this extension or financially preparing for college, give me a call or reply to this email. I’d be happy to help.

^{1. Whitehouse.gov, August 8, 2020}

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