5 things to know about federal student loan forbearance during the coronavirus crisis

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• Federal student loan repayment is being suspended automatically for all borrowers until September 30, 2020.
• If you want to keep paying, you'll have to call. You can opt back into forbearance later, if you need to.
• Borrowers in default will also see temporary stops to wage garnishing, collections, and Social Security, disability, or federal tax rebate withholding.
• If you've made a payment to your federal student loans since March 13, you can get a refund.
• Read more personal finance coverage »

The coronavirus outbreak is causing job losses by the thousands, raising the weekly US jobless count to a record 6.6 million.

If you have a federal student loan, the Department of Education has been working with the government to ease the burden of student loan repayment in this difficult time.

For Americans paying federal student loans, the CARES Act, the legislative economic relief plan created as a result of the coronavirus pandemic, is making some changes to required payments, including reducing interest rates to 0% temporarily and automatically putting payments on pause through the end of September.

For anyone with private student loans, these changes don't apply - you'll need to contact your lender to make arrangements if you've been affected.

1. Payments have automatically stopped until September 30th, 2020

Previously, the Department of Education said that borrowers would need to contact their student loan servicer to put their loans in forbearance. That's no longer necessary: All federal loans are now in automatic administrative forbearance since March 13, 2020.

On September 30, 2020, the forbearance will expire, and auto-pay will resume.

2. You can keep paying your loans, but you have to call

For those who still have steady income, you can still keep paying your loans. Contact your student loan servicer to keep making payments. You can keep making payments manually through the servicer's website, or ask to have automatic payments resumed and opt out of the forbearance.

Since all student loan interest rates have been lowered to 0%, any payments you make will go directly to the principal of the loan, on which interest is calculated. After interest rates resume on September 30, 2020, you might be able to pay less in interest if you've lowered your principal balance by paying now.

3. If you elect to keep paying, you'll be able to opt back into forbearance if your situation changes

If you start making payments, but then lose your job, for example, you're able to go back into the temporary forbearance. If this happens to you, contact your loan servicer. Once back in forbearance, no payments will be due until September 30, 2020.

4. Refunds are now available if you've made a payment since March 13

The US Department of Education is making refunds available for anyone who's made a payment since the forbearance period went into effect on March 13.

If you've made a payment but need it back in your pocket, you'll likely be able to get your money back. The statement posted on the Federal Student Aid website also specifies that you can be refunded for any payment made through September 30, 2020.

5. Anyone in default won't face withholding, wage garnishing, or collections until the forbearance period ends

If you've defaulted on a federal student loan, the government will no longer withhold your income. Wage garnishes, Social Security and disability benefit withholding, and federal tax refund withholding will stop until the forbearance period ends.

There is one exception: If the process to take wages, Social Security or disability benefits, or federal tax refunds was completed before March 13, 2020, money won't be returned. Any withholding for defaulted loan repayment after that March 13 cutoff can be returned to you.

The Department of Education also states that private collections agencies have also stopped as of March 25, 2020. Agencies have also stopped making collection calls, sending letters, and mailing billing statements.

• Read more on managing your money in this tumultuous time:
• 3 options for people struggling to pay their mortgage during the global health crisis
• 4 reasons to get disability insurance, even if you don't think you need it
• If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills
• How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify
• In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more

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