Federally-held student loan garnishments pending until 2021
Salary garnishments for student loan borrowers have been suspended until the end of the year, the Education Department said on August 21.
Borrowers whose federally-held loans default and whose employers continue to garnish wages must be reimbursed those amounts, the ministry said in a statement. bulletin. Student loan collections and payday foreclosures on overdue loans are on hold until the end of the year, the department said.
Until 2021, payments on student loans held by the federal government are automatically suspended without penalty and the interest rate on these loans must be set at 0%, the bulletin said. However, borrowers can choose to make payments.
The August 21 directive issued to the department’s federal student aid office by Education Secretary Betsy DeVos implemented an August 8 law. presidential memorandum to ease student loan payments during the Covid-19 pandemic.
The directive also extended an earlier order that was published in March by DeVos and maintained by the Coronavirus, Aid, Relief and Economic Security Act (CARES Act) which allowed borrowers to temporarily defer loan payments without accruing interest.
The student aid office works with student loan service companies to notify borrowers of the extension.