Updated: January 21, 2021
The new Biden administration has extended the administrative forbearance on federal student loans until September 30, 2021. The interest rate on Direct Federal Loans will remain at 0% and continue to be on administrative forbearance until then. Payments can still be made and will be applied directly to principal during this time.
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.
With the five-year extension of tax-free student loan benefits and all payments on federal direct loans going to principal, 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.