"Three days after President Trump announced he is waiving the interest on federal student loans “to help students and their families” during the coronavirus crisis, the Education Department hasn’t released any details about the plan, leaving unanswered questions about whether borrowers’ monthly payments will actually go down and if the president even has the authority to make such a decision," Inside Higher Ed reports.
"While waiving interest might help borrowers in the long term, it won't do much to help those who’ve lost their jobs during the crisis if they still have to pay the same amount every month, said Ben Miller, vice president for postsecondary education at the liberal think tank the Center for American Progress.
Miller noted that if borrowers request forbearance, interest would normally still accrue on their unsubsidized loans. So they’d benefit if they do not have to pay the interest, either, he said. However, their monthly payments would only go down if the loan servicers recalculate borrowers' payment amounts, said Miller and other experts such as Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators.
What‘s unclear, Draeger said, is if servicers will be told under Trump’s order to automatically recalculate the loan payments, or even if borrowers will be able to ask that their payments be lowered. But he and other policy experts said they’ve heard rumors that the monthly amount due won’t automatically be lowered."
NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 3/17/2020