NORTH TEXAS (CBSDFW.COM) – The U.S. Department of Education granted a payment waiver for at least 60 days to many people during the COVID-19 outbreak.
According to a news release, all borrowers with federally held student loans will automatically have their interest rates set to 0% for a period of at least 60 days. In addition, each of these borrowers will have the option to suspend their payments for at least two months to allow them greater flexibility during the national emergency.
Suspending of payments does not take place automatically, borrowers will have to call their loan servicer to request a waiver and to make sure that their loan is eligible. If the loan is already 31 days late, the loan payments will be suspended automatically. The servicer cannot charge interest, and the waiver should not affect the borrower’s credit score.
Pausing a student loan may not be the best decision for all borrowers. If a borrower’s income has fallen dramatically, it may be better to enter an income-driven repayment program. Programs like these can allow borrowers to have no monthly payments for as long as their income stays low.