Today, President Trump signed a historic $2 trillion stimulus bill into law that was passed by unanimous consent in the House hours earlier.
This relief package allows federal student loan borrowers to suspend payments for six months until September 30, 2020. Borrowers do not need to take any action, yet this measure may take days or weeks for servicers to implement.
Not all federal loans qualify for the automatic suspension. Legacy programs such as Perkins Loans or Federal Family Education Loans (FFEL) are excluded. If you’re unsure which type of loans you have, please connect with a concierge advisor.
Borrowers will still qualify for loan forgiveness programs requiring consecutive payments such as Public Service Loan Forgiveness (PSLF). The 60-day student loan interest waiver has been extended until September 30th as well.
Benefits for Borrowers in Default
The six-month payment suspension will count towards the nine-month rehabilitation process. All collection activity, wage garnishment, and tax refund offsets have been ceased. If you’re currently in default, please enroll in our IonCure program so we can place you into a sustainable repayment plan such as an income-driven option.
Employer Contributions Receive Income Tax Exemption Until End of the Year
Employers who make payments towards their employees’ student loans receive a tax break, as those contributions will not be counted towards gross income.
Employers can contribute up to $5,250 per year, the same limit in place for tuition assistance programs. Employer contributions combined with the six-month interest waiver mean that a significant amount of an employee’s student loan principal will be paid down.
Contact IonTuition today to put your contribution program in place.