{"id":50394,"date":"2021-02-26T11:54:00","date_gmt":"2021-02-26T17:54:00","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=50394"},"modified":"2021-08-12T12:04:14","modified_gmt":"2021-08-12T17:04:14","slug":"coronavirus-student-loans","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/lifestyle\/education\/coronavirus-student-loans\/","title":{"rendered":"Coronavirus financial relief: What help is there for college students and student loans?"},"content":{"rendered":"\n

Editor’s Note: <\/strong>This article was originally published on April 14, 2020. <\/em><\/p>\n\n\n\n

Looking for updates how about the latest stimulus relief affects student loans? Check out our <\/em>Coronavirus tax resource center<\/em><\/a> for details.<\/em> <\/strong><\/p>\n\n\n\n

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted into law. The $2.2 trillion economic stimulus package offers assistance to millions of Americans currently affected by the coronavirus pandemic.<\/p>\n\n\n\n

For most Americans, the CARES Act includes direct aid through several programs including expanded unemployment coverage, stimulus checks and\u2026temporary federal student loan changes. Since that time, additional emergency relief measures extended some of these loan changes.<\/p>\n\n\n\n

\"Student<\/figure><\/div>\n\n\n\n

Read more about the CARES Act stimulus bill<\/a>.<\/p>\n\n\n\n

Let\u2019s get into the details of how students and student loan holders can get help through the CARES Act and other opportunities.<\/p>\n\n\n\n

How is the CARES Act impacting student loans?<\/strong><\/h2>\n\n\n\n

The CARES Act has allocated billions to education, but despite giving federal student loan holders a break, it didn\u2019t include loan forgiveness.<\/p>\n\n\n\n

Here are the changes you can expect as a federal student loan holder:<\/p>\n\n\n\n

Temporary suspension of federal student loan payments<\/strong>
<\/strong>The suspension of payments is automatic for federal student loan borrowers, so there\u2019s nothing you need to do. Automatic payment suspensions will be in place starting March 13, 2020, through September 30, 2021. Originally these payments were suspended until September 30, 2020 and have since been further extended. Check your account online to make sure the suspension is in place.<\/p>\n\n\n\n

If you made payments toward your loan after March 13, 2020, you might be able to get a refund \u2014 contact your lender for more details.<\/p>\n\n\n\n

When it comes to your credit score and lender reporting, you should know that if your account is currently in good standing, loan companies will continue to report it as so. However, this suspension of payments will not wipe the slate clean if your account was past due or delinquent.<\/p>\n\n\n\n

Temporary suspension on involuntary collections<\/strong>
<\/strong>Are you behind on your federal student loans? Under the CARES Act, all involuntary collections of student loan debt are suspended until September 30, 2021 (initially until September 30, 2020). This includes Social Security garnishment, wage garnishment, and seizure of your tax refund through the Treasury Offset Program. <\/p>\n\n\n\n

If you\u2019re participating in an existing loan rehabilitation program, suspended payments will count for the purposes of the rehabilitation program.<\/p>\n\n\n\n

Temporary reduction of interest rate to 0%<\/strong>
<\/strong>The interest rate on all federal student loans is reduced to 0% until September 30, 2021 (initially September 30, 2020). This adjustment will be applied to all federally held student loans, regardless of their status.<\/p>\n\n\n\n

Do ALL federal student loans qualify for relief under the CARES Act?<\/strong>
<\/strong>Most federal student loan borrowers will see an automatic pause on payments and involuntary collections. However, the CARES Act does exclude commercially held Federal Family Education Loans (FFEL) and some Perkins Loans.<\/p>\n\n\n\n

What about private student loans and the CARES Act?<\/strong>
<\/strong>It\u2019s important to remember that the above changes are only in place for federal student loans. The CARES Act rules for student loans do not apply to private loans; it\u2019s up to each independent lender to implement policies and assist their customers during this time.<\/p>\n\n\n\n

Some lenders are providing relief (such as temporarily suspending payments) on a case-by-case basis, so contact your lender directly for the most accurate info.<\/p>\n\n\n\n

Though the CARES Act provides relief for most student loan borrowers, it\u2019s not something that you can bank on and forget about. The best thing you can do right now is to stay informed and contact your loan provider with any questions regarding your account.<\/p>\n\n\n\n

Also, if you haven\u2019t filed your taxes yet this year, make sure you deduct up to the first $2,500 of student loan interest<\/a> you paid in 2020. Every little bit helps. An H&R Block tax pro<\/a> can answer any tax-related questions you have about your student loan.<\/p>\n\n\n\n

For more info on how the coronavirus (COVID-19) will affect your student loans, visit the Department of Education\u2019s FAQs<\/a> page.<\/p>\n\n\n\n

Stimulus payments and more: How else are college students getting help? <\/strong><\/h2>\n\n\n\n

Stimulus checks<\/strong>
<\/strong>Thanks to stimulus relief bills, taxpayers across the country received assistance through stimulus checks<\/a>, including some college students, if they qualify.<\/p>\n\n\n\n

In order to get a stimulus payment, you can\u2019t be a dependent for tax purposes. Generally, you could be considered a dependent for tax purposes if you are either:<\/p>\n\n\n\n