If the Federal Student Loan changes over the past 18 months weren’t confusing enough, the U.S. Department of Education recently announced several more that may leave you wondering how you are affected this time around. The original COVID-19 Emergency Relief measures are tentatively set to expire on January 31, 2022, but the new provisions are either permanent, expire on October 31, 2022, and/or impact a smaller group of borrowers:
- On August 20, the U.S. Department of Education announced that eligible Servicemembers would automatically, and retroactively, receive a 0% interest-rate benefit if they deployed to areas qualifying for imminent danger or hostile fire pay. This is not a new benefit; however, Servicemembers previously needed to submit a form, with supporting documentation, to find out if their loans and deployment qualified for the 0% interest waiver.
- Several updates have been made over the past few months regarding Federal Student Loan Servicers. PHEAA (FedLoan Servicing), Granite State, and Navient will no longer service U.S Dept of Ed-owned loans when their contract expires. Current borrowers will receive numerous notifications throughout the loan transfer process. Watch for those notifications: be sure to save the information or respond as requested.
- The often-troubled Public Service Loan Forgiveness (PSLF) Program is receiving a giant makeover. Some of the provisions are temporary, while some remain unchanged. Regardless, these changes are significant and remain in effect until October 31, 2022.
Are you still unsure of how these changes affect you? Contact an Iowa State University Extension and Outreach Financial Educator today!
The information provided is educational in nature to help you make your own informed decisions and is not intended to substitute for professional advice or serve as an endorsement of any financial product or service. Consult with licensed professionals prior to implementing any of the information provided to determine the course of action is best for you.
Ryan Stuart is a Human Sciences Specialist, Family Wellbeing, with Iowa State University Extension and Outreach. Ryan will be joining the regular blog team soon, so watch for more posts from him.