The U.S. Department of Education is waiving interest rates on federally held student loans for the next 60 days during the COVID-19 national emergency.
Borrowers will also be allowed to suspend loan payments for at least two months to adjust to financial challenges. The measure to put payments on hold reduces accruing interest.
"These are anxious times, particularly for students and families whose educations, careers and lives have been disrupted," said Education Secretary Betsy DeVos. "Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing.”
The Education Department suggests that borrowers contact their loan servicers online or by phone. It also authorized “an automatic suspension of payments for any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent, essentially giving borrowers a safety net during the national emergency.”
For borrowers continuing to make payments, the department said, their payment will apply to the principal on their loan “once all interest accrued prior to the president's March 13 announcement is paid.”
Some borrowers may want to continue making payments, like those seeking Public Service Loan Forgiveness (PSLF) or those enrolled in a repayment plan with a manageable monthly payment.
New York state suspended student and medical debt payments without penalty on March 17.
Of the $1.5 trillion in student debt, one-third is owned by only 6% of all student loan borrowers, according to the Brookings Institution.
"At the other extreme, 18% of borrowers owe less than $5,000 in student loan debt. They collectively owe 1% of the debt outstanding," the November report stated.
About one-quarter of those with student loans borrowed for graduate school, Brookings said, but that one-quarter owns about half of all outstanding student loan debt.
Student debt has been a campaign element in the 2020 presidential election campaign, with candidates proposing various equations for relief.
Students can consult StudentAid.gov/coronavirus for details.