The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed to provide much-needed economic assistance to businesses and individuals.
If you have federal student loans — specifically U.S. Department of Education-owned Direct Loans, FFEL Program Loans and Federal Perkins Loans — you’ll benefit from the coronavirus relief bill.
Student loan borrowers are among those individuals who will get help — anyone holding a federal student loan has been automatically placed in an administrative forbearance, which means your monthly student loan payments will be suspended until September 30, 2020 (now extended to January 31, 2022). You can still make your payments if you want to, however.
Meanwhile, there will be a 0% interest rate on federal student loans during the suspension, and the full amount of your payments will be applied to your balance’s principal after the interest that accrued before March 13 is paid.
Although borrowers with federal student loans are clearly covered under the relief bill, unfortunately, those with private student loans or refinanced student loans won’t benefit from the new law, leaving many to wonder what kind of relief is available to them.
The CARES Act does not cover private student loans because the U.S. Department of Education does not have legal authority over private loans. These are loans that banks, credit unions, schools or other private organizations own.
Private student loan borrowers can find relief, however. It just might take a little more work to get help.
You can contact your private student loan lender or servicer to see what the company can do for you during the coronavirus outbreak.
Many lenders are offering extended forbearance options and other benefits like waiving late fees, not filing negative reports and offering reduced payment options. None of these benefits will be just given to you, however; you have to call your lender and explain your situation.
Lenders offering COVID-19 relief for borrowers
The following private student loan companies are offering relief to their borrowers who have been impacted by coronavirus-related business closures and job loss or who have been otherwise directly impacted by COVID-19, the disease caused by coronavirus:
Citizens Bank is encouraging its customers, including private student loan borrowers, to reach out if the coronavirus has impacted their financial situation. The lender is offering payment assistance for up to 90 days and late fee waivers for private student loan payments.
Citizens Bank’s private student loan COVID-19 relief efforts include:
- No late fees through June 2020.
- Three-month Coronavirus emergency loan forbearance (temporary payment postponement) option. Interest will still accrue during this time, but it won’t be capitalized, and payments won’t be due until after the forbearance period has concluded.
- Option to request another three-month emergency loan forbearance extension.
- Forbearances won’t impact your credit score.
- Coronavirus-specific forbearance options won’t count towards your future forbearance allowance.
You can reach Citizens Bank at 1-866-259-3767 for assistance or read the lender’s Coronavirus Student Loan FAQs for more information.
CommonBond is offering natural disaster forbearance to its members since the coronavirus pandemic has been classified as a national disaster.
Borrowers may take advantage of the program through the end of the national emergency situation. Interest will still accrue, but pausing payments will not count toward your standard forbearance. CommonBond is also waiving late fees during the health crisis.
Earnest is also offering up to three months of forbearance to qualified clients who request it. While interest will accrue during forbearance, the interest will not be added to your unpaid principal at the end of the forbearance period.
Earnest private student loan borrowers can still make payments if they wish during the forbearance period to help lower their loan’s overall cost.
Earnest private student loan refinance customers can submit a request for disaster forbearance online. You should have the following information on hand so Earnest can provide your available options to you:
- Details of how you have been financially impacted
- The industry you (or those in your household) are currently working in
- If Earnest can temporarily postpone your payment, when do you think you can resume payments on your loan?
You should note that Earnest’s current response time is about a week, but it will process your forbearance response from the date it’s received. Any scheduled manual or automatic payments will be processed until your forbearance request is approved.
Laurel Road has alerted its customers that they could be eligible for a forbearance, or an extension if they currently have one, if the coronavirus has impacted their financial situation.
The lender requests borrowers to contact MOHELA at 1-877-292-6845 to inquire about coronavirus-related forbearance and financial hardship.
SoFi is working with its private student loan and student loan refinance customers to find options if they’re experiencing financial hardship because of the coronavirus. Customers are encouraged to log into their accounts and fill out a payment deferral form.
Like with other private student loan refinance lenders, SoFi customers’ interest will still accrue on any postponed payments. Borrowers can also email SoFi at [email protected] with additional questions.
Splash Financial is currently working with its lending partners to bring student loan interest rates down to “historic” levels during the coronavirus pandemic to help borrowers manage their monthly payments. Borrowers can check their rate without impacting their credit score.
Contact Splash Financial if you cannot make your payment. The lender’s customer service team and lending partners are working with borrowers on a case-by-case basis to help put them on forbearance, waive fees or come up with other solutions that fit each individuals’ financial situation.
Splash Financial private student loan refinance customers can reach the lender at 1-800-349-3938 or [email protected] with inquiries or assistance requests.
Contact your private student loan refinance lender to discuss your options
Do not worry if you don’t see your private student loan refinance lender listed above. Your lender’s website might not have its COVID-19 response plan listed. If that’s the case, your best bet is to call your lender and see what relief options are available to you. The sooner you call, the sooner you can put a plan together.