Updated Student Loan CARES Act Details
I attended a (very exciting) webinar from NASFAA, where the covered a few unanswered questions and provided updates on student loan CARES act details (or implications).
- As was previously announced, accruing interest and payments are halted as of March 13th, and through Sept. 30th. Most borrower statements are now showing 0% interest, and servicers are working to enact payment suspension ASAP.
- Many borrowers have made payments through ACH since March 13, and today we confirmed today that these payments area eligible for a refund by contacting the loan servicer. HOWEVER, if an economic hardship doesn’t exist for the borrower, we are suggesting holding off on contacting servicers immediately. Nearly 10 million people have submitted jobless claims in the last two weeks, and the servicers are buried. The payment suspension WILL happen automatically if it hasn’t already, even for those enrolled in autopay. We will continue to provide updates and reminders as this evolves. If any of your clients and prospects (and family or friends for that matter) have made superfluous payments that reduce loan forgiveness such as PSLF, they can request a refund later once the dust settles from all of this. We won’t forget to remind our network!
- Anyone wishing to make payments over the next 6 months may do so manually; these payments will be applied to outstanding interest first, and then principal.
- The CARES Act does NOT apply to private, institutional, most FFEL (2010 or earlier), Perkins and other non-Direct loans… but some of these can be consolidated to Direct and then eligible. DWOQ can help people determine which loans, and the benefit available, if they are unsure.
- Loans refinanced a private lender (Sofi, Laurel Road, CommonBond, Splash, etc.) are NOT eligible for the stimulus. That said the opportunity exists right now to secure the lowest rates we’ve ever seen, on federal loans or by re-refinancing. Our newest partner, Splash, is advertising 5-year fixed rates under 3%… AND they will pay up to a $1000 bonus! Let us know if you’d like us to visit – or revisit – this marketplace for any clients/prospects.
I hope everyone is staying healthy and sane out there. Please share this with anyone who might benefit, as it is the most current information.
‘til DEBT do us part,
This is an update written by Jason DiLorenzo of Doctors Without Quarters.
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