As part of the $2 trillion stimulus package approved by Congress, federal student loan payments and interest are suspended for six months (extended from the previous 60 days). But, like everything government, this thing is complicated. Here’s how to take advantage of suspended student loans:


Make sure your student loan is, in fact, federally funded.

If your loan is a Direct loan or a PLUS loan, that means it’s a federal government student loan and it qualifies for this stimulus benefit. Whether you’re an undergraduate student or graduate student, it doesn’t matter. Navient writes that student loan relief ends Sep. 20, 2020.

Some students sell their loans to private lenders after they graduate to get a better interest rate, meaning that the federal government no longer owns the loan. If that’s you, then read on.


If you’re still in school, your federal student loan interest stops accruing.

If you’re still attending school, then you haven’t even started paying back those loans yet, anyway. But, if you’re smart, you’ve been paying interest.

Log in to your Navient account and see the lovely 0% interest amount under your loan(s). The suspension of accruing interest was automatically applied retroactive to Mar. 13, 2020. That’s good news because that interest adds up fast.

More good news: the interest you’re being forgiven won’t need to be repaid. This could save some students hundreds, depending on how big their loans are. For example, $20K in Direct student loans will wrack up approximately $1,000 in interest per year.


Payments will stop automatically for Direct and PLUS federal student loans.

If you’ve been out of school and paying on your loans, those payments will be suspended for six months regardless of whether or not you have a job. (Under normal Direct loan terms, if you lose your job, you can apply for forbearance for six months, anyway.) Where your loan payment was once automatically deducted from your paycheck, you might see that’s not happening. You can either celebrate by purchasing a year’s supply of toilet paper (if you can find it) or skip to the last tip for a smarter financial strategy.

Note: the payments won’t compound. So, don’t worry. The government won’t come to collect six months of back payments after this period is over.

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Call your private lender and ask them to suspend loan payments.

If your loan isn’t owned by the federal government, your bank might have a relief program of its own (many are receiving government bailouts, so they are passing help on to customers). So, please call if you haven’t heard from them since the stimulus package was passed.



Teachers: If you’re in a Public Loan Forgiveness Program, you get a bonus.

If you are enrolled in any of the Loan Forgiveness Programs offered by the federal government for students who gain post-graduation employment with a U.S. federal, state, local, or tribal government or not-for-profit organization (teachers, first responders, military), you get a bonus. Your payments and interest are not only suspended for six months, but the government pays itself on your behalf. That means for six months you don’t make a payment, and no interest accrues, but the amount you would have paid still comes off your loan(s). Boom! (And thank you for your service — we appreciate you!)


If you can keep making student loan payments, you really should.

Want to take a nice chunk out of that loan? Do it now! If you’re still employed, you can make your loan payments manually. Navient has an option for manual payments under “Your Account.” This is a sound financial strategy, as your payments would be going towards the principal.


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Federal Student Loan Payments Suspended for Six Months (and Interest, too.)