Plan A or Plan B? Know your current college aid options
Besides bringing a bit of relief to American families and businesses; the CARES Act covers some college students with loans. Signed into law in late March 2020, the Covid-19 rescue package also provides a financial lifeboat for students sidelined by the coronavirus.
Anyone concerned about college loan repayment should watch for ongoing news from the U.S. Government and Department of Education, but here’s the first lifeline extended to students through the CARES Act:
Loan payments halted through Sept. 30
To provide relief to student borrowers during this emergency, all federal student loans have been automatically placed in administrative forbearance. That allows students to temporarily stop making monthly loan payments – with no penalties.
From March 13, 2020, through Sept. 30, 2020, the student loan interest rate was lowered to 0% on the following types of federal student loans held by the U.S. Department of Education:
- Defaulted and non-defaulted Direct Loans
- Defaulted and non-defaulted Ffel Program loans
- Federal Perkins Loans
Loans made by commercial lenders or Perkins Loans held by your college require you to negotiate payment plans directly with those institutions. As of now, all loans are not eligible for this benefit.
Other questions about student loans:
Will I be able to finish my studies interrupted by the virus and keep my federal student aid? Most schools have arranged for students to complete the current term and continue with financial aid provided.
Since my parents couldn’t go to work during the shutdown, they didn’t get paid. That means my financial need has increased. Will I be able to get additional dollars to continue my education? Talk to a financial aid officer at your school. Colleges have the flexibility to ensure that students can afford to finish their education.
Will I still get paid for hours I was unable to work on campus in a Federal Work-Study job? Your school may pay you or allow you to work by another means — such as, doing work online or remotely, depending on the nature of your job. If neither has happened, contact your college financial aid office to find out your options.
What if I have other questions about paying college expenses for next term? Check your school’s website for resources and contact information. Call the Financial Aid Office to negotiate decreases in fees for any refunds in room and board or other fees. Contact private loan servicers, visit StudentAid.gov/login or call 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf or hearing-impaired 1-800-730-8913) for assistance.
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