This AskRegs Knowledgebase Q&A has been updated to reflect the U.S. Department of Education StudentAid.gov announcement, which extends the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity through January 31, 2022 for all federally held student loans.
Unfortunately, we don’t yet know if new loans will carry the interest suspension. We have asked the U.S. Department of Education (ED) but have not gotten a response. As soon as we have a definitive answer to this question, we will update this AskRegs Q&A and post it in our COVID-19 Web Center and in Today's News. Be sure to visit the Web Center on a daily basis, as guidance is continuously changing.
Remember: For borrowers who are receiving the interest suspension, the interest rate technically is not zero on these loans. Even if the loan servicer indicates a zero percent interest rate, the interest rate on the loans remains the interest rate assigned to the loan when it was originated. See AskRegs Q&As, What Are the Direct Loan Interest Rates For 2020-21? and What Are the Direct Loan Interest Rates For 2019-20?, for example. Accrual of interest is just suspended from March 13, 2020 through January 31, 2021 on eligible federal student loans.
AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.