Earlier this week, the U.S. Department of Education announced a plan that would provide temporary relief to tens of millions of borrowers during the COVID-19 national emergency.
The order affects all borrowers with federally held student loans. Those individuals will have their interest rates dropped to 0% for at least 60 days and will have the opportunity to suspend payments for at least two months, allowing borrowers to temporarily stop their payments without worrying about accruing interest or penalties.
It's hoped the order will give borrowers greater financial flexibility.
"These are anxious times, particularly for students and families whose educations, careers and lives have been disrupted," U.S. Secretary of Education Betsy DeVos said in a statement. "Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing."
DeVos has directed all federal student loan services to grant an administrative forbearance to any borrower with a federally held loan who requests one. The forbearance will be in effect for at least 60 days, beginning on March 13, 2020. Borrowers should contact their loan servicer online or by phone to request a forbearance. She also authorized automatic suspensions of payments for any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent.
If borrowers, like those seeking Public Service Loan Forgiveness or those enrolled in a repayment plan with a manageable monthly payment, want to continue making payments, their entire payment will be applied to the principal amount of the loan once all interest accrued before March 13, 2020, is paid.
If any borrower has lost their job or had a change in income, they can contact their loan servicer to discuss lowering their monthly payment.
For more details on the Department of Education's plan, visit studentaid.gov/coronavirus.
How Can I Decrease My Potential Student Loan Debt?
Students interested in going to college without accumulating vast amounts of student loan debt have several options.
Ohio's College Credit Plus program is a dual enrollment program designed to provide students in grades 7-12 who attend public or private schools or who have been homeschooled with the opportunity to earn both high school and college credits from post-secondary institutions in Ohio. The goal of CCP is to encourage more students to consider attending college and provide already college-bound students with a quicker route to reaching their academic goals.
Some of the benefits of CCP include:
- Students can get a head start on earning a college degree or certificate.
- Students can experience what being a college student is really like.
- Students can save money on tuition and textbook fees.
Students interested in saving even more money can then take their CCP credits and transfer to a two-year school. Financial advantages of attending a local two-year school include:
- Lower tuition rates
- Lower transportation costs
- Students can still live at home
- Students can work part-time
- Students can obtain the skills they need to enter the job market much sooner.
- Most two-year schools have partnerships with four-year colleges that allow students to pursue their bachelor's degree at a discounted rate.