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What does the CARES Act mean for my student loans? Thumbnail

What does the CARES Act mean for my student loans?

You may have heard that the recently passed CARES Act has some benefits for borrowers of student loans during this coronavirus public health emergency. However, unless you want to dive into the congressional legislation for yourself, here is a summary of how this act may affect you, and steps that you can take depending on your scenario.

To start, this act applies to federal student loans only. These include Stafford subsidized and unsubsidized loans for undergrads, unsubsidized graduate loans and Parent PLUS loans, but will not apply to loans from private lenders.

For those with private loans, it is best to assume that you will continue to pay your private student loans over your typical payment period.

If the CARES Act does apply to you as a federal student loan borrower, you must consider the following. The payments on your student loans will be suspended through September 30th, and as a result no interest will accrue on these loans during this time.

For those affected, your federal student loan servicer will automatically suspend your federal student loan payments for you, and during this time period, your interest rate on the loans will be automatically set to 0%.

This is a significant relief for student loan borrowers who cannot currently afford their monthly payments, but also presents a great opportunity if you are still able to make your monthly student loan payments.

If you are able to continue to make your monthly payments, you will be able to pay down your student loans at a 0% interest through September 30th.  These interest free payments will allow you to pay down your loans faster than expected.

There is one catch however for those looking to take advantage of interest free payments on their student loans. You must contact your federal loan servicer and ask them to remove automatic payment suspension on your account. Otherwise the default option from your loan servicer will pause all current payment plans.

Interpreting this act is complex, and if you have any questions on how it will affect your student loan scenario, feel free to reach out. We are here to help!


All the best,


Andrew Holmes




Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.



 “Text - S.3548 - 116th Congress (2019-2020): CARES Act.” Congress.gov, 21 Mar. 2020

Friedman, Zack. “How To Pay Your Student Loans During Coronavirus.” Forbes, Forbes Magazine, 27 Mar. 2020

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