The Department of Education announced the implementation of President Trump’s recent memorandum ordering the suspension of payments and interest accrual on federally held student loans through December 31.
The extension of this suspension builds upon both the legislative mandate in the CARES Act and prior administrative orders to suspend payments and interest accrual on federally held loans through September. In addition to halting both payments and interest accrual, the Department also announced the continuation of the CARES Act requirement applying non-payments toward the required payment count for Public Service Loan Forgiveness and forgiveness under income-driven repayment plans.
While the action taken by the administration continues relief for federally held loans, the extension, as well as the original CARES Act-required suspension, does not apply to Federal Family Education loans or Perkins loans, which are not held by the Department of Education. Similarly, the administration’s action does not apply to private student loans over which the Department of Education does not have legal authority.
Throughout the federal response to COVID-19, PAEA and external stakeholders have advocated for federal student loan relief supporting:
- Increased investments in service-based federal loan repayment programs such as the National Health Service Corps
- Forgiveness of existing balances for health professionals
- Improved borrowing terms under the Unsubsidized Stafford Loan program for PA students
Members with questions regarding the extension of student loan relief and PAEA’s student loan advocacy can contact Tyler Smith at tsmith@PAEAonline.org.