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Dept of Education on Cares ACT and Loan Repayment

Certified student loan advisors for clients with student loans

As previously noted on 8/8/20, President Trump signed an executive order extending the repayment flexibility offered under the CARES act through December 31, 2020.

Last Friday, the Departmentof Education (ED) and Federal Student Aid (FSA) provided further clarification through this press release

Interest-free period extended

The action extends the actions taken by Secretary DeVos at the start of the national emergency and is maintained under the law by the CARES Act. Effectively, the release confirms that the CARES Act initially scheduled to end on 9/30/20 has been extended to 12/31/20.  

According to the release, all borrowers with federally held student loans will have their payments automatically suspended until 2021 without penalty. The interest rate on all federally held student loans will be set to 0% through the end of the calendar year. 

Non-payments by borrowers working full-time for qualifying employers will count toward the 120 payments required by the Public Service Loan Forgiveness program and as payments needed to receive forgiveness under an income-driven repayment plan.

Re-certification requirements 

Of note to many of you is the re-certification requirements under your current IDR plan. ED has updated their borrower resources and now indicates that no borrowers are required to re-certify your plan before December 31, 2020, regardless of whether your re-certification date would have happened before 12/31/20.

Previously ED had indicated that re-certification would be “pushed out” 6 months; however, ED now only shows that the date will be “pushed out,” without direction as to when. At this time, it’s unknown when re-certifications will be due if they were originally “pushed out”—more info to follow when available.

Some services (particularly FED Loans) have not been adhering to the regulation “pushing out” re-certification. If your re-certification was originally due before 12/31/20, it’s imperative that you know your rights. 

You should not be placed on a “post IDR plan” and should not have any interest capitalized (added to your principal), nor should your payment increase! 

Previously ED had stated borrowers would resume their old IDR payments at the conclusion of the forbearance, but that is no longer included in the guidance.

Please keep an eye out for any letter indicating that you have missed your re-certification if that re-certification was between March and the end of the year or if you have a new re-certification date.

FSA is working in partnership with its student loan servicers to notify borrowers of this extension of loan relief measures. This outreach effort will continue through the fall and toward an eventual return to repayment. FSA’s servicers are working to make these changes, and borrowers can expect to see this extension reflected in their accounts over the next several weeks.

About the Author

Jantz Hoffman

Jantz is the executive director and co-instructor at the CSLA Institute who administers and oversees the ethical and professional standards of the Certified Student Loan Professional (CSLP®) designation.

He received his masters in business with a certificate in finance from Colorado State University in 2014 and his bachelors degree in education from Humboldt State University in 2002.


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Student loan advising is complicated. Financial professionals should know the intricacies of student loan repayment rules and position themselves to provide the best possible advice to clients.

The CSLP® Program provides you with the knowledge and support to provide accurate recommendations to student loan repayment planning challenges.

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