In case you missed it, earlier this week President Trump agreed to suspend US student loan payments until September 30 as a direct result of the COVID-19 pandemic.
But what exactly does this mean? Is it automatic? Will you incur any more fees?
Here’s everything you need to know about the announcement.
Will it happen automatically?
No, this is an optional perk. Bear in mind that this is only for federal student loans. So basically, those that are owned by government agencies such as Direct Loans. This perk doesn’t include private student loans or FFEL Loans.
Do I have to pause my payments?
As said above, this is a optional perk. If your work (and therefore your pay) is not affected by the COVID-19 pandemic, and you wish to continue paying, this is completely fine and your choice.
If I choose to not pause my payments, is my interest rate 0%?
Yes! Whether you pause your payments or not, the interest rate is 0%. So now could be the perfect time to pay off as much of your loan as you can.
Will I incur any additional fees if I choose to suspend my payments?
Luckily, no. If you suspend your payments, the federal government will still count the ones you haven’t made as part of any required federal student loan forgiveness program.
You won’t be subject to any late fees or penalties whatsoever.
Will I still accrue interest?
There will be no no interest accrued on your loans up until September 30. As above, this only applies to federal student loans. The interest rate will be set to 0% and no new interest will be accrued.
Does this mean that the federal government will pay these instalments for me?
Nice try, but no. Your actual balance won’t change up until the end of September.
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