April 02, 2021
Student Loan Relief Expanded
This week, the Department of Education announced that it is extending the student loan relief provisions initiated in the CARES Act to borrowers who have defaulted on their loans in the Federal Family Education Loan (FFEL) program. These provisions include the pause of collections activity and zero percent interest and are extended to borrowers with privately-held FFEL loans.
When the CARES Act was signed into law, the student loan relief provisions were only for loans held by the federal government and thus excluded millions of student loan borrowers from receiving relief.
The Department’s action will apply to 1.14 million borrowers who defaulted on a privately-held FFEL program loan and protect more than 800,000 borrowers who were at risk of having their federal tax refunds seized to repay a defaulted loan. This relief will be made retroactive to March 13, 2020, the start of the COVID-19 national emergency, and any of these loans that went into default since March 13, 2020, will be returned to good standing.
When the CARES Act was signed into law, the student loan relief provisions were only for loans held by the federal government and thus excluded millions of student loan borrowers from receiving relief.
The Department’s action will apply to 1.14 million borrowers who defaulted on a privately-held FFEL program loan and protect more than 800,000 borrowers who were at risk of having their federal tax refunds seized to repay a defaulted loan. This relief will be made retroactive to March 13, 2020, the start of the COVID-19 national emergency, and any of these loans that went into default since March 13, 2020, will be returned to good standing.