CARES Act (COVID-19): 0% Interest and No Payments for 6 Months on Federally Held Student Loans
Student loan borrowers of federally held student loans began receiving notices from their loan servicer recently with some good news. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) recently signed into law, included some financial reprieve for borrowers of the Direct Loan, Federal Family Education Loan, and Federal Perkins Loan programs - due to the novel coronavirus (COVID-19). The CARES Act reduced the interest rate to 0% and deferred payments for a period of six (6) months. There should be no action required on the part of borrowers.
In a letter dated April 3, 2020, FedLoan Servicing, a loan servicer for the U.S. Department of Education, notified borrowers of actions its taken and included other important information. If you have federal student loan(s) serviced by FedLoan Servicing, you should receive a similar notice provided herein.
Other federal loan servicers will most likely take similar action by automatically adjusting the interest rate and updating student loan statuses by way of an Administrative Forbearance. We encourage borrowers to log onto their servicer's website to check on the status of their federal student loans. To find out who your loan servicer is, call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243. The following are loan servicers for federally held loans.
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