What a relief to know that U.S. Secretary of Education, Betsy Devos, announced the extension of the federal student loan forbearance period to January 31st, 2021. This is great news for those who have student loans that have suffered job loss, had medical issues or dealt with other concerns due to Covid-19.
What this means to you:
- No payment required until after January 31st, 2021
- No interest accrual until after January 31st, 2021
- A zero payment still counts towards qualifying payments for an income-driven repayment plan, loan rehabilitation agreement, and public service loan forgiveness programs
- Wage garnishment continues to be on hold
If you do not have Federal Direct loans, however, you can not take advantage of the forbearance period and will continue to accrue interest. Many times borrowers don’t realize they don’t have the correct loan type to take advantage of some of the benefits. If your loans were disbursed prior to 2007 its possible the loans are still FFELP loans and would need to be adjusted to Federal Direct loans to qualify.
Don’t lose out on zero interest and zero payments due to failure to act. Contact Degrees of Success to learn more on how you can ensure your loans are the right loan type to get zero interest and zero payments along with other benefits. Also, keep in mind, when Biden calls for the cancellation of $10,000 per borrower in loans it will be required for the loans to be Federal Direct loans as FFELP loans would not qualify. Therefore, making this change is very important.
As Biden and his administration take office, I would expect even more changes to occur on how student loans are handled so be sure to stay connected to learn what steps may be needed going forward and how to best position yourself to take advantage of any opportunities that may present themselves over the next four years. Be sure to contact me with any questions you may have to ensure the successful management of your student loan debt.
Continue to be Safe and Happy Holidays!
Dr. Genevieve Dobson
Degrees of Success
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