Trump waives student loan interest admit COVID-19 outbreak
The global COVID-19 outbreak has impacted many aspects of our lives and has been particularly disruptive for students as many schools and colleges have transitioned to online classes. Given the state of the economy, many students are also concerned about their student loan payments.
To help students in this situation, President Donald Trump announced on March 19th that “to help our students and their families, I’ve waived interest on all student loans held by federal government agencies and that will be until further notice.” For students this should offer some relief as they navigate these turbulent times. Below, we’ll unpack everything for you.
What does this student loan interest waiver mean?
Essentially, students will not be responsible for paying back their student loan interest on federal student loans until “further notice.” (note that this does not apply to private students loans). This will include student loans in income-driven repayment and student loans in forbearance. This means that you will only be responsible for the student loan principal going forward. In other words, it is not a deferral or waiver on student loans payments all together, just on the interest component.
How do I take advantage of this program?
According to a spokesperson from the Department of Education, the interest will be waived automatically and the policy should be put into effect in March. However, everything will be retroactive to March 13th even if you don’t see the formal change on your student loan portal. Some of the details are still not clear as far as how this will be implemented, so we recommend that you stay on top of emails from your student loan providers and regularly check the website for details.
I’m looking at my student loans and don’t see any changes?
The Department of Education stated that it will take a bit of time to get this up and running online. As of March 18th, I do not see an update on my personal student loan portal. According to MyFedLoan, one of the companies that the federal government works with to handle student loans:
“The federal government has announced that it will be waiving interest specifically for federally-held student loans during this time. We are working with the United States Department of Education to obtain further guidance. We will provide more information as it becomes available.”
What if I can’t afford to pay my student loans now?
The federal government also offers forbearance on the entire student loan payment, which means that you can essentially hit “pause” on your student loans. Usually, one of the downsides of forbearance is that interest still accumulates while your loans are “paused.” However in this situation, the interest is deferred, which will result in some serious financial relief for students with federal loan debt. Students can apply for forbearance online provided they are going through some sort of hardship due to unemployment or underemployment, medical expenses, or other financial difficulty.