What Does Coronavirus Mean for International Student Loans?
April 20th, 2020 by Al C

Repayments of federal student loans in the United States will be paused automatically between March 13th 2020 and September 30th 2020 and interest is being temporarily set at 0%, meaning that if you are in receipt of a federal student loan your payments will stop during this time and there is no penalty for doing so in terms of additional interest being accrued. This policy was included in the CARES Act which was signed into law by the President on March 27th. You may, if you choose to, continue to repay, but this is optional.

Coronavirus and international student loans

Read this if you’re looking for more general information about loan repayment for international students.

However, the U.S. Department of Education does not have legal authority over private student loans, and they are not covered by the CARES Act. This applies to federal student loans that have been refinanced through a private lender. Note that some FFEL Program loans and Perkins Loans are not owned by the federal government.

So, how will you be affected by the Covid 19 outbreak?

Some private lenders are offering students relief, such as temporary forbearance.

The good news is that private lenders are taking the current situation into account and are making accommodations for those students who suffer economic hardship and may struggle to make their student loan payments – they will work with you to give you options and find the best solution.

For the most up to date information you should contact your lender directly to find out about making payments – especially if money is a big concern for you at the moment.

We will summarize the range of options that may be available to you due to the Coronavirus pandemic, and you should check directly with your lender which ones are available through your account.

The key message is this: If you can’t afford to make the payments on a private student loan, you should contact your lender as soon as possible. They might be willing to offer solutions, such as a forbearance, which would suspend your payments for a short time, meaning that you would not default on your loan, and would thereby protect your credit.

Remember, though, interest will likely still accrue if your private loan payments are paused, and this could ultimately increase your monthly payment, and the total you pay over the term of your loan. 

Here are some of the most common new initiatives that private lenders have put in place:

  • Up to 3-month (or 90-day) forbearance period – a temporary pause on your repayments. Some lenders have left this open ended for “as long as the national emergency continues”
  • Waiver of late payment fees
  • Temporary reduction of interest rates
  • Temporary reduction of repayments
  • Extension to loan repayment term
  • 60-day forbearance with options to extend

If you have questions about your rights, contact customer service or your account manager at your lender to receive the most up to date information.

Q. I have some federal and some private loans – what does this mean for me?

If you have both federal and private loans and focus on making the payments of the private loans while qualifying federal loans are suspended.

Q. Do I need to apply to suspend my payments or interest?

For Federal programs, no. For private lenders you should contact them as soon as possible.

Q. Do I need to pay a fee to suspend my payments?

No – if you are contacted by someone requesting a fee to assist you with your student loan and offering this type of service be aware that it may be a scam.



Read more:

General information about loan repayment for international students

Information about Federal Loans during Coronavirus

Learn about Study Abroad Loans

Find out if you are eligible for a loan

5 Comments

  1. Ramesh says:

    looking for an international loan for my daughter from next year 2021 who got a seat at a US University to study Computer Science will like to know more about the terms of repayment and interest and how to proceed if we must go through school or directly pls give us max info thus we can take a decision

    • Al C says:

      Thank you for your comment. Repayment will vary depending on the exact terms of the loan and the lender you receive the loan from.

      The interest rate and repayment will depend on the loan option and lender you select. After you select the loan that works best for you, you will need to review the terms or contact the lender directly with your questions. If your loan requires a cosigner the interest rate is calculated based on an index plus a margin that will add an additional percentage interest rate depending on your cosigner’s creditworthiness. Based on their creditworthiness, an additional interest rate will be added to the index which will be the total interest rate you owe and at that point you can determine whether you’d like to proceed. Every lender’s range varies so it is important to do the loan comparison and review the interest rate and repayment terms.

      https://www.internationalstudentloan.com/international_student/faqs.php

  2. […] Read about how Coronavirus affects loan repayment […]

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