Education Dept. says borrowers can now pause student loan payments amid pandemic. They already could

Personal Finance

US Secretary of Education Betsy DeVos

Saul Loeb | AFP | Getty Images

U.S. Department of Education Secretary Betsy DeVos announced on Friday that student loan borrowers could put their monthly payments on pause for at least 60 days during the coronavirus outbreak. 

DeVos said this pause, coupled with the suspension of interest on student loans President Donald Trump announced last week, would allow borrowers to be “focused on staying safe and healthy” and “not worrying about their student loan balance growing.” Bills for certain delinquent borrowers would also be paused during the pandemic, according to the statement. 

However, it’s unclear how the announcement brings any more relief for student loan borrowers, most of whom can already request that their debt be put into temporary postponements known as forbearances and deferments. And since the government has said it will stop interest from accruing on student loans during the pandemic, these options are now more favorable to borrowers. 

“This proposal does not really move the needle much for borrowers who are struggling to repay their student loans,” said Mark Kantrowitz, a higher education expert. 

In the meantime, some student loan borrowers say they’re still being charged interest on their federal student loans despite the waiver announcement the President made a week ago. A spokesman for the U.S. Department of Education said any of that interest that accrued after the president’s announcement will be retroactively removed. 

What’s more, many borrowers may find it difficult to get anyone on the phone with whom to place a request that their loans be put into the 60-day break.

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Student loan servicers FedLoan and Granite State Management and Resources announced recently they were closing down call centers due to the pandemic.

The closures have left borrowers with no way to get help on their loans during a trying time, said Seth Frotman, executive director of the Student Borrower Protection Center.

“As student loan companies shut their doors and turn off their phones in response to the virus, borrowers are being cut off from access to critical protections,” Frotman said.

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