Now that the COVID-19 payment pause has ended, student loan payments have restarted. For most borrowers, the first payment after the payment pause ended was due in October 2023. Review important concepts, tips, and recommendations for repaying your student loans at Repaying Student Loans 101.
Millions took advantage of COVID mortgage forbearance
Millions of homeowners requested the relief, with some 7.8 million granted forbearance from March 2020 through March 2023, according to the Mortgage Bankers Association.
Does interest accrue during administrative forbearance? Loan servicers may initiate administrative forbearance because of ongoing litigation, paperwork delays, clerical issues, or global events, such as the COVID-19 pandemic. During this time, interest does not accrue on your student loans.
No, you can no longer get refunds for payments you made during the COVID-19 payment pause. The refund benefit ended on Aug. 28, 2023. Prepare for student loan payments to restart.
If your loans were eligible, we automatically paused your loan payments and set your interest rate to 0% from March 13, 2020, until Sept. 1, 2023. This payment pause is also known as an administrative forbearance. You can no longer get refunds for payments you made during the COVID-19 payment pause.
You were either enrolled in the SAVE Plan or about to have your payments lowered under it. A federal court recently blocked the implementation of the SAVE Plan. To comply with the court order and prevent incorrect billing, the Education Department directed MOHELA to place affected borrowers into forbearance.
MOHELA administrative forbearance
Others received bills with incorrect payment amounts. As a result, the Education Department instructed MOHELA to put affected borrowers into an administrative forbearance until the issue was resolved.
That is, time spent in administrative forbearance may not count toward loan forgiveness. This is the case with income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) during the SAVE plan's pause (more on that below). In this situation, the time it takes to qualify for forgiveness could be extended.
With forbearance, you won't have to make a payment, or you can temporarily make a smaller payment. However, you probably won't be making any progress toward forgiveness or paying back your loan.
Borrowers can refinance after a forbearance, but only if they make timely mortgage payments following the forbearance period. If you have ended your forbearance and made the required number of on-time payments, you can start the refinancing process.
Under the new law, forbearance shall be granted for up to 180 days at your request, and shall be extended for an additional 180 days at your request. 1 Remember to make the second 180-day request before the end of the first forbearance period.
You can usually only be in a general or discretionary forbearance for 12 months at a time, before you have to ask for an additional forbearance, and no more than 3 years total.
Biden Administration Extends Student Loan Collections Pause Until 2025. According to Politico, the Biden administration indicated last week that it will not pursue involuntary collections activities against defaulted federal student loan borrowers until early 2025.
Loan forbearance can impact your credit depending on how lenders report relief payments to credit bureaus. If payments are reported as delinquent, forbearance may harm your credit. However, many types of forbearance shouldn't hurt your credit.
No, the government will not take your refund (for now). But before you start celebrating, here are five things you need to know about your student loan in 2024. Your student loan interest will continue to accrue.
Typically, months in forbearance and deferment do not count towards PSLF. However, months during the COVID-19 payment pause (March 2020-September 2023), months that qualify under the IDR Adjustment, and months where loans are being placed on administrative forbearance after the repayment restart will count toward PSLF.
In October 2023, the U.S. Department of Education disclosed that MOHELA failed to send monthly student loan bills to 2.5 million borrowers, resulting in 800,000 borrowers missing a monthly payment.
Covid-19 Forbearance On FHA-Insured Single-Family Mortgages: The COVID-19 Forbearance options for FHA's Single-family insured mortgages and HECM Extensions will end on November 30, 2023. The last day that borrowers can apply for either forbearance option is May 31st of 2023.
Any borrowers with loans that have accumulated eligible time in repayment of at least 20 or 25 years will see automatic forgiveness, even if they are not currently on an IDR plan.
Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.
The department first implemented the forbearance in August 2024 due to ongoing litigation between the department and seven states challenging the debt cancellation effort's legality. The plan is under an injunction preventing the department and servicers from forgiving loans.
Administrative Forbearance: A temporary suspension of, a reduction of, or an extension of time for making principal and/or interest payments on a Stafford, SLS, PLUS, or Consolidation loan that is granted by the holder or lender, upon notice to the borrower or endorser, and that does not require a written request from ...
If you work in certain public service jobs and have made 120 payments on your Direct Loans, you may be eligible to have your loans forgiven. If some or all of your payments were not made on a qualifying repayment plan for PSLF, you may be able to receive loan forgiveness under a temporary opportunity.
⚠︎ SAVE Plan Borrowers
All borrowers on the SAVE student loan repayment plan have been placed in an administrative forbearance due to the pending lawsuits. Learn more about the litigation here.