Lisa, Here Are Your Articles for Wednesday, May 13, 2020
Is this email not displaying correctly?
View it in your browser .
Website Services Tax Tools Financial Tools Resources Referrals
Share Save

CARES Act Grants Breaks on Some Student Loans

 

The Coronavirus Aid, Relief and Economic Security Act contains a break for borrowers seeking student loan repayment delays. The upshot is that it's expected to take a bit of time for the benefits to be reflected in borrowers' accounts, but there are indications that relief will be applied retroactively, meaning the delay won't seriously disadvantage anyone.

There's a lot of information that is still unclear regarding the program, and it is expected there will be more guidance in the near future.

According to the nonprofit Student Loan Borrower Assistance, payments will be suspended from March 13, 2020, through Sept. 30, 2020. Loan servicers will cease automatic payments during this period. No additional interest will accrue as a result, although some confusion about how interest will be calculated in the future remains.

Also, there are a lot of limitations. Not every loan classified as a student loan is eligible. The act generally addresses only Direct Loans and Federal Family Education Loans currently owned by the U.S. Department of Education. Neither Perkins Loans nor commercially held FFELs are covered by the act. Private student loans are off the table as well, according to the SLBA, which says about 9 million federal student loan borrowers have at least one loan not covered under this program.

A key provision also addresses credit reporting: If you do have a loan suspended under the program, it will not be reported as a default, but as a regularly scheduled payment. This is good news for students worried that this program would lead to a black mark on a future credit report.

More information is available on the SLBA site and the Education Department site.

 

 
Share Save

Your Comments

McCullough Rossi & Company, Ltd.
McCullough Rossi & Company, Ltd.
Trusted Accountants. Confident Advisors.
2300 Barrington Road, Suite 260
Hoffman Estates, IL 60169-2034
Office: (847) 843-3919
info@mrcltd.com
Follow Me on Twitter
Connect with me on LinkedIn
Saved Articles
Comments and Feedback
Refer A Friend
Your Privacy
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
Powered by
Copyright © IndustryNewsletters All rights reserved.

This email was sent to: lisa@bigcitybrandco.com

Mailing address: 2300 Barrington Road Suite 260, Hoffman Estates, IL 60169-2034