CARES Act covers PSLF payments

[Peachtea]

*This thread is intended as useful information for people who have student loans and are using the PSLF program, not as a debate on the merits of PSLF or the student loan relief enacted.*

As an FYI for gov student loan borrowers, payments and accrued interest are suspended until Sept 30 (although borrowers can still make payments on principle if they want). For those of us on PSLF the law specifies that these months of suspended payments will count as qualified payments for any forgiveness program. So if you’re in PSLF and on autopay, you might want to turn it off and put that loan money to other uses. There’s news coverage of this, but for the paranoid (like me), here is the text of the law, Section 3513.

https://www.congress.gov/bill/116th-congress/house-bill/748/text?q=%7B%22search%22%3A%5B%22chamberActionDateCode%3A%5C%222020-03-25%7C116%7C17000%5C%22+AND+billIsReserved%3A%5C%22N%5C%22%22%5D%7D&r=1&s=8#toc-H84A93012B87A4D09A1F0A6DE5E61EE31

For borrowers not on a forgiveness program, it’s a chance to beef up an emergency fund or etc., but will delay the end date of getting rid of the loans if not making payments, even if there’s no interest. So more pros and cons to weigh than those on PSLF.

[FireAnt]

Nice!!!

[Peachtea]

Nice!!!

Yup! And for once, the language is simple and specific enough that I don’t think there will be an interpretation issue.

[Carmen909]

Thanks for posting this information!

[LearningMustachian72]

Thanks so much for sharing!

[Peachtea]

As an update and more info, Dept of Ed has finally updated their website with info on CARES act provisions. It confirms that between March 13 and Sept 30, 2020, payments will be suspended and still count towards loan forgiveness. https://studentaid.gov/announcements-events/coronavirus#forbearance-questions

Also interesting is auto-debits are supposed to be suspended AND that you can get refunded for any payments made after March 13. So if you made a March payment, check the date to see if you can get it refunded.

[trytrying]

The application does ask for a date in which you were affected by the virus, I'm not sure I would suggest suspending payment if you haven't suffered a loss of income.

The program is difficult enough to navigate without giving them ammunition in denying your case at a later date.

[Peachtea]

The application does ask for a date in which you were affected by the virus, I'm not sure I would suggest suspending payment if you haven't suffered a loss of income.

The program is difficult enough to navigate without giving them ammunition in denying your case at a later date.

There’s no application for the CARES Act suspension, it’s automatic. I think you’re referring to the penalty/interest free forbearance that was available under the March 13 Executive Order. If you applied for that, everything has since changed, so you should check out the link above to Dep’t of Ed to see the updates. They just updated their site yesterday, April 2, about the March 27 CARES Act suspension, and fedloan has updated their site today. This confused a friend of mine too, especially because until now the Dep’t of Ed and fedloan didn’t have accurate info.

The new suspension I described above supersedes the executive order forbearance option. Before you had to apply to opt in to forbearance and it did not count towards PSLF. Now everyone is automatically being placed in administrative forbearance and auto debits will be suspended. You have to actively ask to be taken out of forbearance or make manual payments. The law, and now the Dep’t of Ed and fedloan sites, all make clear that the months of suspended payments from March 13 to Sept 30 will count towards PSLF forgiveness. I would still cancel autopay just because I feel it will take them time to cancel everyone’s and then refund people. And if you made a March payment (after the 13th), I’d ask for a refund rather than hope they remember to give you one.