Updated 12/9/2020: This article has been updated to reflect additional information from UC Berkeley graduate student Ishvaku Vashishtha.
In response to the COVID-19 pandemic, U.S. Secretary of Education Betsy DeVos announced an extension of the forbearance period and a pause in interest accrual on federal student loans Friday.
With this extension, borrowers do not need to make payments on their loans through Jan. 31, 2021. According to a U.S. Department of Education press release, those who do make payments will have a 0% interest rate. Collections activity on defaulted loans, which are loans with missed payments, will also be suspended through January.
“The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted,” DeVos said in the press release. “The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate.”
DeVos’ announcement follows a series of steps taken by the U.S. Department of Education since March to provide accommodations for federal student loan borrowers amid the pandemic, according to the press release. Before the extension was announced, student loan borrower benefits from the Coronavirus Aid, Relief and Economic Security Act were initially scheduled to terminate Dec. 31, 2020.
UC Berkeley Assistant Vice Chancellor and Director of Financial Aid and Scholarships Cruz Grimaldo said in an email that the extension of benefits through January provides “an additional month of relief” for student loan borrowers.
“However, we know that the impact of the pandemic will be long lasting, and a one-month extension will not address student needs, as many borrowers currently report feeling unprepared to resume making student loan payments in the short-term,” Grimaldo said in the email.
According to Grimaldo, more than 7,000 UC Berkeley students currently borrow federal student loans and have benefited from the suspension of interest accrual on student loans since March. She added that the student loan benefits have also helped UC Berkeley alumni who were scheduled to begin repaying their loans during the pandemic or may have defaulted on their loan payments.
For Ishvaku Vashishtha, a campus graduate student, the pandemic has worsened his family’s financial situation. Vashishtha said in an email that it has become harder for him to make loan payments on time and added that while he is happy about the extension, it is the “bare minimum.”
UC Office of the President spokesperson Ryan King said in an email that the UC system welcomes the extension of the student loan forbearance period during this “economically challenging time.” King added that UC-held loans are prepared to resume repayment after Jan. 31, and the UC system will follow guidance from the federal government if additional student loan relief is available.
“UC will continue to advocate for the University’s priorities, including more federal financial aid to students, debt relief to struggling alumni, and increased investment in our institutions on the frontlines protecting public health during this pandemic to be included in future stimulus bills,” King said in the email.