On Mar. 13, during a press conference in the White House Rose Garden, President Trump announced he would freeze interest on student loans as part of his national emergency declaration resulting from the coronavirus pandemic.

Adam Minsky reported for Forbes that Trump’s order will freeze interest accrual on federal student loans indefinitely, until the policy is changed.

Even though the freeze is temporary, the order was implemented automatically and borrowers are already seeing a 0% interest rate on their loans.

Unfortunately, students with privately held loans or certain federally-guaranteed loans are not covered by the freeze, Minsky reported.

Borrowers will still be required to make their normal monthly payment as the order does not offer former students payment relief of any kind.

Minsky reports that the order did not stop “forced collections” if a borrower is in default.  So those individuals will continue to suffer penalties like wage garnishments or seizure of federal and state tax refunds.

One week later, on Mar. 20, the Department of Education offered payment relief for those in financial distress.

Marc Hebert is a certified financial planner who reported for ABC 9 WMUR that borrowers with federal loans like Direct Loans, Federal Family Education Loans and Perkins Loans will be eligible to have their payment suspended for a period of 60 days.  This means you can stop paying for up to two months without becoming delinquent.

Borrowers will have to request that their payments be suspended and need to remember to reinstate automatic payments through their bank following the suspension period.

Herbert advised that continuing to make payments during the suspension period will benefit borrowers, as relatively more of their loan will be paid off with federal student loan interest temporarily frozen.