The CARES Act, passed in March 2020, had a major impact on the repayment of federal student loans. The legislation effectively paused all payments on federal direct student loans by temporarily moving interest rates to 0% and placing loans on an administrative forbearance.
Originally, the CARES Act provided this relief through September 30, 2020, and it was subsequently extended on two occasions through January 31, 2021.
The COVID relief bill signed by President Trump on December 27, 2020, did not further extend this provision. This means that unless something is done by the Biden administration during the first ten days, borrowers with federal direct student loans will resume payment on February 1, 2021.
With the five-year extension of tax-free student loan benefits and student loan repayment set to resume soon, there has never been a better time for employers to implement a student loan benefit program. Student loan benefits, like those offered by BenefitEd, can not only help employees pay down their loans faster, but also help them navigate the repayment landscape.
For more information about student loan benefits, please contact BenefitEd.