The new law automatically postpones borrowers payments for six months. But the outdated information on the department’s website references earlier orders from the Trump administration that only provided two months of relief that required people to opt in.
Several borrowers working toward loan forgiveness contacted The Washington Post out of confusion about how the payment suspension would affect them. The department said it expects to update the information by the end of the day.
“We want to make sure we are following the law Congress passed and are providing accurate and complete information to our customers,” Education spokeswoman Liz Hill said Wednesday. “The bill was just signed on Friday.”
By Monday, most of the companies the Education Department uses to manage its $1.5 trillion portfolio of student loans had notices about the $2 trillion aid package knowns as the CARES Act. The loan servicers mostly described accurately the provision of the law that provides a six-month suspension of payments. They promised further updates in the coming days.
Not every servicer was as forthcoming. FedLoan Serving, the company administering the government’s loan forgiveness program for borrowers in public service jobs, made no mention of legislation. The company did not respond to request for comment Wednesday but has since updated its website.
The stimulus legislation built on a number of measures the Trump administration had introduced earlier in the month to help federal student loan borrowers, as the coronavirus started to slam companies and workers. Whereas the administration pledged to waive interest and let people postpone their payments for at least 60 days, the legislation extended the timeline through Sept. 30 and made the suspension automatic.
Lawmakers also lengthened the moratorium on seizing tax refunds, wages and Social Security income to repay defaulted debt to six months, instead of the 60 days instituted by the department.
Under the Trump administration’s original order, borrowers working toward Public Service Loan Forgiveness who postponed payments also would have faced a longer path to debt cancellation. The federal program cancels the remaining balance of a borrower’s debt after 120 on-time monthly payments, but postponing those payments would have lengthened the process under Trump’s order.
Lawmakers fixed that problem by ensuring that each month of postponed payments would still count toward loan forgiveness. It would also count toward student loan rehabilitation, a federal program that erases a default from a person’s credit report after nine consecutive payments.
The swift and unforgiving impact of the pandemic has forced the federal government to respond in kind with orders and legislation to mitigate the economic fallout. Consumer groups say the swift implementation of those measures is critical and worry about the Education Department and other federal agencies’ ability to rise to the challenge.
- Education notebook – Northwest Arkansas Democrat-Gazette
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- US Department of Education Releases “COVID-19 Handbook, Volume 2: Roadmap to Reopening Safely and Meeting All Students’ Needs” | US – U.S. Department of Education
- The more you learn, the more you earn: education and poverty alleviation in Thailand – UN News
- Dep’t of Education issues emergency order waiving test requirement for seniors, series of adjustments – Florida Politics
- D.C. mayor proposes boost in education spending as she calls on schools to fully reopen in the fall – The Washington Post
- Faculty invited to apply to General Education Scholar Program | Penn State University – Penn State News
- US Department of Education Announces More Biden-Harris Appointees | US – U.S. Department of Education