Moneyman's College Financial Aid Blog

It has been quite a week. I’m sure you feel the same. I’m trying to balance my need to be updated constantly with the latest news with a desire not to be constantly inundated with what’s going on.

Last night I took a break and watched a great old movie. It was just the break I needed; light and comedic, and just fun. What are you doing to try to find time to balance? What tricks are you using if you are working out of the home (in a gas station, restaurant, grocery store) to relax, and if you aren’t able to work right now, what relaxation tip works for you? I’m interested!

Speaking of interest, today’s update focuses on some interesting news: what is happening with student loan interest. As you may be aware, the President has put a temporary hold on interest for all Federally held educational loans (this includes Direct Subsidized Loans (in repayment), Direct Unsubsidized Loans, Direct PLUS Loans (both for parents and for graduate students) and Direct Consolidation Loans.

But what does this really mean for student (and parent) borrowers? And what do you need to do in order to make sure that your loans are taken care of during this crisis? Well, moneyman has you covered.

According to the announcement by Secretary of Education, Betsy DeVos, interest on education loans held by the Federal government will be set to 0% for a period of at least 60 days. This means that for students still in school, interest will not accrue for their Unsubsidized Loans. For students in repayment, their loans will still have the same monthly payment amount, but their regular monthly payment will be applied entirely to their principle.

For borrowers in repayment, there is an ability to suspend repayment by asking for a forbearance. This means that (especially if you are struggling right now or need some relief for payment) you can qualify for a suspension of payments and during the time of that suspension of payment no interest will accrue. You must request a forbearance from your servicer (the company that processes your payments); don’t simply stop making payments (although borrowers who are 31 days late or more will automatically be placed on forbearancee). If you are possibly going to qualify for Public Service Loan Forgiveness you also don’t want to stop making payments since you need to have 10 years of repayment (120 months) to qualify.

Well interest keeps on building in student loan interest so here is some breaking news. As I was working on this post, some details are coming out about the $2 trillion stimulus package passed today by Congress. According to CNN, the law includes a provision suspending student loan payments without payments for 6 month (through September 30). Stay tuned for more details as we know them. Another article specifies a few other financial aid related items which are part of this bill: 0% interest during these 6 months, the ability to keep unspent Pell Grant or student loans due to withdrawals, and the waiver of any penalties for further financial aid due to these withdrawals.

More information will be coming I am sure. For now, though, let me know how you are finding balance in these days. I will be watching some silly old comedies.