In an effort to help the country grapple with the ongoing COVID-19 pandemic, which has left millions of Americans unemployed, the U.S. Department of Education is offering relief on most federal student loans until at least October. While this is great news for many Americans with student loan debt, navigating federal loans can feel challenging and confusing at the best of times. So, how can you determine whether your loans qualify for temporary relief? Let's break it down.
Federal student loan borrowers will receive a reprieve from their monthly payments until October, as well as a break from monthly interest accruement. Since there are multiple types of student loans, however, not every borrower will qualify for this relief program. If you have a "Direct" federal loan owned by The Department of Education then your loans will qualify for relief. All Parent Plus loans should qualify, as well.
If, however, you hold Federal Family Education Loans or Perkins Loans, you will only qualify for COVID-19 relief if they're federally held. Only a small percentage of these loans are federally held, so, make sure you double check the type of loan you have to see if you're eligible for payment and interest relief. You can check the type of loan by visiting the Federal Student Aid website and logging in to your account. To find out if your loan is federally held, check who your lender is. The lender of Federally Held loans are listed as the U.S. Department of Education.
When requesting deferments or forbearance under normal circumstances, student loan borrowers are required to apply for relief. Under the COVID-19 relief measures, however, the payment and interest deferments will happen automatically. Automatic, recurring payments that go from your bank account to your lender will also automatically freeze as of Friday (April 10).
If you have private student loans, unfortunately, you won't qualify for any government relief on your payments or interest. Loans that were originally owned by the U.S. Department of Education but refinanced privately are also not covered by the COVID-19 relief measures. Borrowers with private loans should reach out to their lender to discuss flexibility on payments and interest during the pandemic.