Student loans and the COVID-19 coronavirus crisis
Federal student loans
The federal CARES Act was signed into law on March 27, 2020. It provides help for some federal student loan borrowers:
- It provides relief for federal Direct Loans and federally held FFEL (Federal Family Education Loan Program) loans.
- If your loans are covered by the new law, you will get notice in the next 15 days (from March 27, 2020).
- Your Direct Loan and covered FFEL payments will be suspended until September 30, 2020.
- While your payments are suspended, the interest rate on your covered loans will be 0%.
- Suspended loan payments will be treated as if the payment was made for purposes of loan forgiveness and loan rehabilitation.
- There will be no negative credit reporting on your loan accounts while your payments are suspended.
- For Direct Loans and federally held FFEL loans already in default, all collection activity will be suspended. This means your wages will not be garnished, taxes will not be offset, and benefits will not be offset.
For more information, see the Student Loan Borrower Assistance website.
Private student loans
The State of Vermont mandated that private lenders should work with student-loan holders to provide help. If you have a private student loan — including one from Vermont Student Assistance Corporation (VSAC) — contact your student loan servicer or lender to identify the options that might apply to you. They include:
- providing forbearance (postponement) of payments for at least 90 days
- waiving late-payment fees
- protecting borrowers from negative credit reporting
- ceasing debt-collection lawsuits for 90 days, and
- enrolling in appropriate assistance programs, such as income-based repayment.
Borrowers with private student loans can look for contact information on their monthly billing statements. VSAC borrowers may call 1-833-802-8722.
Learn more about this help and where to turn if you have a complaint on the Vermont Department of Financial Regulation (DFR) website.
General student loan resources
- Managing Student Loans - Student Loan Borrower Assistance website
- Discharging a Student Loan Due to Disability - Student Loan Borrower Assistance website
- Getting or Repaying Student Loans - Consumer Financial Protection Bureau website
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