Department of Education extends pandemic-related benefits

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Without elaborating on its authority for doing so, the Department of Education recently announced the extension, through January 31, 2021, of certain pandemic-related benefits for federal student loan borrowers.

In particular, the administrative forbearance period, the 0% interest rate (pause in interest accrual), and the suspension of administrative wage garnishment and other collection activity will all remain in effect.  As a result, borrowers who have federal student loans will not have to make any payments until February of next year, although they may still do so if they wish.  These “non-payments” will still count towards the number of payments required under an income driven repayment plan, as part of a loan rehabilitation agreement, or for Public Service Loan Forgiveness.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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