Secretary DeVos extends student loan relief until January
Education Secretary Betsy DeVos announced Friday that the forbearance of student loan payments for federal student loans would be extended until January 31, 2021.
With the increase in coronavirus cases and the economy still in a fragile state, many were worried payments resuming in January. In a press release, Secretary DeVos said: “The coronavirus pandemic has posed challenges for many students and borrowers, and this temporary pause in payments will help those who have been affected.”
Secretary DeVos’ announcement indicates that the extension will still suspend accruing interest and that payments made will go directly to the principal of the loan. In addition, the press release clarifies that time will count for payments required for remission under the income-based repayment plans and the utility loan remission program.
This new extension goes just beyond when President Trump steps down and President-elect Biden will be sworn in. The door is still open for Biden to extend the suspension of student loan repayments beyond that date. Biden supported the suspension of payments and offering $ 10,000 student debt relief for each borrower in a coronavirus relief program, an idea pushed by Senator Elizabeth Warren.
At the same time, Congress is currently negotiating another coronavirus relief package that could also extend the forbearance period beyond January. The weak employment report also released on Friday will likely help some argue for a further continuation of the repayment break.
Borrowers with private student loans or federal loans issued under the old banking system are not covered by this relief. These borrowers could get some relief under a Congressional relief deal, but it’s still too early to say what, if any, will be included.
This story is developing and will be updated as more is learned.