(1) COVID-19 Student Loan Impact
As many Americans throughout the country participate in self-quarantine, mortgage and rent payments, heat and electricity payments and student loans continue to weigh heavily on smaller paychecks. In response to many citizens working a reduced schedule or temporarily losing employment, during this time of uncertainty state and federal government continue to provide options for Americans, specifically through student loan waivers.
On March 13, 2020, President Trump issued a statement waiving any accruing interest on any student federal loan payment. The Department of Education states that any borrower with a federal loan — including those in income-driven repayment and in forbearance — will have interest waived until the temporary policy ends.
However, these actions will likely not lower the amount a borrower owes each month, unless servicers are told to recalculate monthly payments. Borrowers’ payments will go directly toward the principal, allowing borrowers to pay off their loans faster.
Borrowers who cannot pay due to financial hardship may still need to go into forbearance. Luckily, the interest that would normally accrue during the forbearance is waived, so the borrower’s balance will not grow. Given the rapidly changing nature of this pandemic, it is unclear how long this policy will be in effect.
(2) Free COVID-19 Testing
The relief law also confirms the government’s assurance that COVID-19 testing is free and Americans have free health care when seeking a test kit. Importantly, free health care does not extend to the necessary treatment following a final test. While the current tests are not widely accessible, as of March 19, 2020, hopefully the mass production of test kits will continue to grow.
If you have any questions about this article or need further information regarding COVID-19 student loan impacts or free COVID-19 testing, please contact your Davis|Kuelthau, s.c. attorney, the author linked above, or the related practice group chair linked here.
We will continue to monitor the impact of COVID-19 and provide guidance to businesses via our Coronavirus Legal and Business Resource hub.