Tens of millions of borrowers have had student loan interest waived in response to the COVID-19 pandemic. For a minimum period of 60 days, borrowers with federally held student loans will have interest rates set at 0% and will also be given the option to suspend their payments for at least two months. With recent findings revealing that 76% of Americans are worried that the coronavirus will trigger an economic recession, this will be welcome news to borrowers concerned about their economic stability in the coming months.
With social distancing and even lockdown measures being introduced nationwide, there is concern among workers, 54% of whom (opens in new tab) say they would not get paid if the coronavirus caused them to miss work for at least two weeks. With 33% of all employed people saying it would be difficult for them to keep up with their basic expenses if their work was suspended, the option to suspend student loan repayments will come as a welcome lifeline.
"These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted," said Secretary DeVos (opens in new tab) in a press release from the Department of Education. "Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing."
Some Democrats are saying this is not enough, however, and have proposed (opens in new tab)forgiving $30,000 in student debt per borrower to ease the financial hardship that coronavirus will cause. There is currently over $1.5 trillion owed in student debt by a total 45 million borrowers, and a recent report has found (opens in new tab) that this is “weighing on household finances and the broader economy", as borrowers fail to pay off any of their outstanding balance.
If you want to suspend student loan repayment for 60 days, you can contact your federal student loan provider to request an administrative forbearance.
What are private student loan companies offering borrowers?
This news is all well and good for federal student loan (opens in new tab) borrowers, but what are the rest of the best student loan (opens in new tab) companies offering borrowers amid coronavirus uncertainty? For the most part, you will still accumulate interest on your private student loans. However, some companies are extending the offer of forbearance in the event of financial hardship.
Borrowers with a Sallie Mae (opens in new tab) private loan should contact the company directly to discuss assistance, according to SavingForCollege.com (opens in new tab). Citizen Bank (opens in new tab) is offering a three-month forbearance that will not count against borrowers' lifetime forbearance limits.
CommonBond (opens in new tab) has said that “if the student doesn't return to school or has entered repayment, the student can request forbearance to pause payments until they are able to make their normal monthly payment.” However, it seems that this will still count against forbearance limits.
Not all private student lenders have been clear about their response to the COVID-19 outbreak, but it's definitely worth contacting your lender directly to discuss your situation. If you're concerned about your student debt, you might want to consider looking into the best debt consolidation services (opens in new tab) to make repayments more manageable. If your student loan repayment plan isn't offering enough relief in these uncertain times, the best debt settlement companies (opens in new tab) can help to clear debt more permanently.