December 2020
Five Things We Want Borrowers to Know About Federal Student Loans and COVID-19
On Aug. 8, 2020 a presidential memorandum extended the forbearance to federal student loans included in the CARES Act. This forbearance allows for a 0% student loan interest rate and suspension of payments on federal student loans owned by the Department of Education (ED) until Dec. 31, 2020. The original relief measures began March 13, 2020.

As we get closer to January 2021, here are five things we want borrowers to know:
1. Federal student loan payments are scheduled to start up again in January
Federally held student loan payments are on hold by the Department of Education until December 31, 2020. This means borrowers have not been required to make monthly payments. If a borrower has made payments during this time, a refund can be requested through the student’s loan servicer.

Now is a great time to make a plan for January. Borrowers can start by logging into their loan servicer account or to see when payments are due and how much is owed. We want borrowers to know that if they are unable to make payments, options exist.
2. Options exist for borrowers struggling to make payments
Automatic payments will resume after Dec. 31, 2020, for borrowers who had auto-debit set up prior to payment suspension. If borrowers are worried about their ability to make payments after the payment suspension ends, here are some options:
  • Federal student loans have a variety of income-driven repayment (IDR) plans based on income. Under an IDR plan, payments are based on how much income the borrower earns and may be as low as $0 per month. Borrowers should check out’s Loan Simulator to identify available options that meet their needs and goals.
  • Borrowers who already on an IDR plan, but who are currently unemployed because of the COVID-19 emergency, should update (recertify) their information to see if they qualify for a new, lower payment amount. Borrowers should log in here and complete the required steps.
  • If these options aren’t beneficial, the borrower should contact their loan servicer to discuss additional deferment or forbearance options for after the payment suspension ends on Dec. 31, 2020. A deferment or forbearance could continue the pause on payments for a period of time. For more information go to
3. Extended income recertification deadlines for those already on Income Driven Repayment (IDR) plans
As part of the pause on student loan payments due to COVID, all borrower income recertification dates have been changed from the original recertification date. Borrowers will not have to recertify their income before Dec. 31, 2020. Borrowers will be notified by their loan servicer when it is time to recertify but it’s great for borrowers to be proactive and contact their servicer to make a plan.

Reminder: It’s important to keep an eye out for notifications about when to recertify their income; if a borrower misses this step, payments will no longer be based on income and may be much higher than anticipated.
4. Avoid Coronavirus-related scams!
Legitimate loan servicers will not call borrowers to make an offer regarding loans and expect payment from borrowers for being moved into a new repayment plan. Also, there is NO FEE for this payment suspension or 0% interest period—not from the federal government and not from loan servicers. If someone asks for money for either of those reasons, it’s a scam. Loan servicers provide free help with borrower questions or concerns about loan payments. There is no coronavirus-related loan forgiveness for federal student loans. Learn more about avoiding student loan scams.
5. Opportunity Maine flexibility may be coming
The Educational Opportunity Tax Credit, known as Opportunity Maine, is a Maine Tax Credit that reimburses student loan payments or reduces state tax liability for college graduates who live and work in Maine.
Governor Mills has proposed that Maine relax some rules related to Opportunity Maine. For one, borrowers who are otherwise eligible for the tax credit would be able to count the student loan payments that would have been made during deferment or forbearance, including loans covered by the CARES Act. In addition, for Mainers who were employed in Maine prior to, or during the pandemic, and who became unemployed as a result of the pandemic, Governor Mills has promised to introduce legislation in January to allow them remain eligible for the Opportunity Maine Tax Credit.
Maine Revenue Services is submitting emergency rulemaking to the Secretary of State to implement these Opportunity Maine changes. Visit the Opportunity Maine website for more updated details in the months to come.
Do you work with student loan borrowers and want more information?
Join us for this month's FREE Wednesday Webinar:

Counseling Student Loan Borrowers During and After COVID-19

Wednesday, December 9, 2020
1:00–2:00 p.m.

What a long, strange trip this year has been! Student loan borrowers and those of us who receive questions from them have seen some things we’ve never seen before. This session will provide an overview of the student loan related CARES Act waivers, particularly those options that affect borrowers in default or those pursuing Public Loan Service Forgiveness. We’ll also talk about the scenarios we’re hearing about from borrowers – both those eligible for the CARES Act waivers and those that aren’t – and how we are advising them. Finally, we do some prognosticating on the coming year based in part on the results of the election.
For additional helpful information and resources, find previous issues of 5 on the 5th on our website.

FAME's College Access and Financial Education Team:

Mary Dyer, Financial Education Officer
Maria MacDougal, College Access Counselor
Floreka Malual, College Planning Advisor
Nikki Vachon, College Access Counselor
Jessica Whittier, College Access Counselor
Mila Tappan, College Access and Outreach Manager
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