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SDSU Extension Advises on Student Loan Payment Suspension

BROOKINGS, S.D. - Almost 45 million Americans have student loans, and during months where everything seems uncertain, meeting those payments can be challenging. The federal CARES Act has addressed this issue, but for those not familiar with interpreting legislation, it can be confusing to sort through.

Lorna Saboe-Wounded Head, SDSU Extension Family Resource Management Field Specialist, shared, “The first thing you need to know is who owns your loans, as the CARES Act only applies to any federal loans, and not any that have been consolidated with private lenders.”

Information related to loan ownership can be found online at It’s important to note that private companies may still offer assistance during the pandemic but aren’t subject to the same rules outlined here.

Saboe-Wounded Head says the CARES Act includes a break in student loan interest accrual and suspension of payments until September 30, 2020 for loans with the Department of Education. Perkins loans would also fall under this category if they were held by the Department of Education, but not if held by the individual school, for example.

Suspended payments count towards income-driven repayments (IDR) plans and public service loan forgiveness (PSLF). The payment and interest suspension were backdated to March 13 instead of March 27, so suspended payments count towards loan rehabilitation, and garnished wages and tax refunds seized after March 13, 2020 can be refunded.

“If you are still in a position that allows you to pay, I recommend keeping up payments.”

— Lorna Saboe-Wounded Head, SDSU Extension Family Resource Management Field Specialist

“The payments will reduce the principle of your loan after accrued interest is paid, which means you could be paying off more of your original debt by sticking with your monthly payments during the pandemic.”

She continues, “If your loans apply, the interest rate should automatically read as 0% starting in early April with no extra paperwork needed from you.” However, as with any large financial change, it is always recommended that you follow up and verify that the correct changes have been made to your accounts.

For more information, contact Lorna Saboe-Wounded Head, SDSU Extension Family Resource Management Field Specialist.