Personal Finance

Stimulus package grants student loan borrowers a six-month reprieve


An ambulance sits outside the US Capitol in Washington, DC, March 23, 2020, as the Senate continues negotiations on a relief package in response to the outbreak of COVID-19, known as the coronavirus.

Saul Loeb | AFP | Getty Images

The historic stimulus package Congress is expected to pass  to inject relief into an economy reeling from the coronavirus pandemic would grant the millions of Americans with federal student loans a break from their payments for at least six months. 

Based on language in the $2 trillion bill, which is still subject to change, federal student loan borrowers wouldn’t have to make a payment toward their debt until this October. Any interest that accrues during the suspension will be waived. 

The U.S. Department of Education would also put a halt to its collection practices during the health crisis, including seizing defaulted borrowers’ tax refunds and Social Security checks. That should bring relief to the roughly 9 million borrowers in default, or those who haven’t made a payment in a year or more.

There’s also a provision that says employers wouldn’t have to pay taxes on financial assistance they give to their employees for their student debt, though it only lasts until the end of the year. 

More from Personal Finance:
Stashing cash? Savings interest rates sink
How to make your money work harder in the coronavirus crash
These banks are offering coronavirus financial aid

Plans to help the 45 million Americans with student debt amid the pandemic, many…


Germany and the Netherlands seem to fight off the virus better than most. Here’s why

Previous article

NY, Hawaii, North Carolina ask FEMA for help handling dead

Next article

You may also like

Leave a Reply

Notify of