Resources for Student Loan Borrowers

Debt Relief Resources for Federal Student Loan Borrowers.

Last Updated: November 22, 2022

Payment Pause

On November 22, 2022, the Biden Administration extended emergency federal student loan benefits, including the payment pause, zero-percent interest rate, and halt on collections and wage garnishments.

Payments will resume 60 days after the Department is permitted to implement its one-time debt relief program or the litigation is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that.

One-Time Debt Relief

In August 2022, the White House announced plans to provide targeted student debt cancellation to federal student loan borrowers whose loans are held by the Education Department.

However, as of November 10, 2022, courts have issued orders blocking the relief program. As a result, the Education Department is not currently accepting applications. The Education Department has said that it’s “seeking to overturn those orders.”

If you’ve already submitted a debt relief application, the Education Department says it will “hold your application.”

If the courts decide that the student debt relief program is allowed to move forward, loans issued before June 30, 2022 would be eligible, including loans made to graduate students and parents. If you aren’t sure what type of loans you have, you can log in to your StudentAid.gov dashboard using your FSA ID to see specific information about your loans.

Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college would be eligible for up to $20,000 in debt cancellation. Borrowers who met those income standards but did not receive a Pell Grant would be eligible for up to $10,000 in relief.

As of September 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.

Borrowers with FFEL Program loans and Perkins Loans not held by ED who have applied to consolidate into the Direct Loan program prior to September 29, 2022, would be eligible for one-time debt relief through the Direct Loan program.

ED is assessing whether there are alternative pathways to provide relief to borrowers with federal student loans not held by ED, including FFEL Program loans and Perkins Loans, and is discussing this with private lenders.

The administration also announced plans to implement a new income-driven repayment plan for federal student loans. This new plan is expected to become available sometime in 2023. In the meantime, you can still enroll in existing IDR plans, which base your monthly payments on your income. If you’re in an income-driven plan but your financial situation has changed, be sure to update your information with your servicer so they can calculate a new payment amount.

In addition, the Department released more details on its “fresh start” initiative, which will help borrowers who were delinquent or in default before the payment pause get their loans back into good standing. An FAQ on this initiative is available here: https://studentaid.gov/announcements-events/default-fresh-start

You can check Federal Student Aid’s FAQ page for updates here: https://studentaid.gov/debt-relief-announcement/

We will continue to update this page as new information is available.

General Information on Ongoing COVID-19 Student Loan Benefits

The CARES Act, which was signed into law in March 2020, included emergency student loan benefits, including suspending payments on most federal student loans. The CARES Act benefits, which were originally set to expire on September 30, 2020, have been extended several times, most recently by the Biden Administration.

In short, if your loans are covered (more on that below), you do not need to worry about making loan payments until the end of the pause. There will be no penalty for not making payments and your loan will not go into delinquency or default. Interest will not accrue.

You do not have to take any action to receive these benefits. If your payments were on auto-debit, the auto-debit was automatically cancelled when the benefits were enacted. Because there was lag time between when the benefit started and when the Education Department is able to put it into action, servicers automatically applied any interest you paid after March 13, 2020 to your principal balance. You also have the option of obtaining a full refund of any payments that were made during the payment pause (starting March 13, 2020). You must contact your loan servicer to request such a refund.

All months of payment suspension count as “qualifying payments” if you’re working toward forgiveness under Public Service Loan Forgiveness or income-driven repayment.

The Education Department is also required to report each month of suspended payments to credit bureaus if they were regular monthly payments made by the borrower.

According to an Education Department spokesperson, any unpaid interest that was on your account as of March 13, 2020, will not capitalize at the end of the suspension period.

If you would still like to make payments during this period, you can do so. You can also contact your loan servicer and ask to be opted out of the payment pause and have auto-debit payments re-instated. You can also log in to your online account and make one-time payments at any time. During this period, the full amount of your payments will be applied to principal once all the interest that accrued prior to March 13, 2020 is paid.

If you decide to opt-out of the automatic payment suspension and continue making regular payments but then experience a change in income, you can contact your loan servicer as soon as possible to discuss options, such as enrolling in an income-driven repayment plan to lower your payments.

If you paid any interest on your loans since March 13, 2020 your servicer will automatically apply that interest to your principal balance unless you request a refund of the payment.

If you’re in an income-driven repayment plan, you don’t have to worry about re-certifying your income before the end of the pause, regardless of whether your recertification date would have happened prior to that date.

As part of the administrative forbearance, your recertification date has been pushed out from your original recertification date. You will be notified of your new recertification date before it is time to recertify.

If you’re currently on an income-driven repayment plan and your income has changed significantly, you can update your information and get a new payment amount based on your current income.

To do so, visit StudentAid.gov/IDR, click on “Apply Now,” and then start the application by clicking on the button next to “Recalculate My Monthly Payment.” After the administrative forbearance ends, your monthly payments will resume at the new amount.

If you would like to enroll in an IDR plan for the first time, visit StudentAid.gov/idr, click on “Apply Now,” and then start the application.

Are My Loans Covered?

The vast majority of federal student loans are covered by these benefits:
- Direct Loans (both non-defaulted and defaulted loans)
- FFELP Loans owned by the federal government (both non-defaulted and defaulted loans)
- Perkins Loans owned by the federal government

Unfortunately, however, these benefits don’t apply to two types of federal student loans — older FFEL loans held by commercial lenders and campus-based Perkins loans, which are held by colleges and universities.

If you aren’t sure what type of loans you have, you can use the National Student Loan Data System (NSLDS) to find out what federal loans you have and who your loan servicer is. You must log in using your FSA ID to see specific information about your loans.

If Your Loans Are in a Grace Period

You will receive administrative forbearance (and your loans will remain at the 0% interest rate mentioned in the section above this one) for any period after your loans enter repayment between March 13, 2020, and the end of the pause.

For example, if your loans entered repayment on April 15, 2020, you will receive a forbearance from April 15, 2020, through the end of the pause, and the interest rate on your loan will be zero percent during this period.

Note that entering repayment is a capitalization event, which means any interest that accrued on your loans prior to March 13, 2020 will be capitalized (added to the principal balance) at the end of your grace period.

You can make payments during the forbearance and prior to entering repayment if you wish to avoid capitalization of some or all of the outstanding interest that accrued on your loans prior to March 13, 2020.

If You Were Late on Payments but Not in Default Prior to the Payment Pause

If you were at least 31 days behind on your payments as of March 13, 2020, or became more than 31 days delinquent after that date, you were automatically placed in an administrative forbearance to give you a safety net during the COVID-19 national emergency. You do not have to take any action to receive these benefits.

Being in an administrative forbearance means that you can temporarily stop making your federal student loan payments without becoming delinquent.

Because interest is being waived during the COVID-19 national emergency, interest will not accumulate while you are in forbearance.

If Your Loans Were in Default Prior to the Payment Pause

If your student loans were in default as of March 13, 2020, the Education Department will not attempt to collect on your loans through the end of the pause. This means collection agencies will not be making phone calls to borrowers or issuing collection letters and billing statements during this period.

During this period, the federal government will also not withhold money for defaulted student loans from your federal income tax refunds, Social Security payments, or other federal payments including the rebate payments also included in this bill.

The Education Department also said it would refund offsets that were in the process of being withheld on March 13, 2020 (the date the president declared a national emergency and announced emergency executive actions related to COVID-19).

If you were in the process of rehabilitating a defaulted loan as of March 13, 2020, each month of suspended payments will be counted toward your rehabilitation.

For those who have their wages garnished, the Education Department sent letters to employers instructing them to make the change to borrowers’ paychecks. The Department says it will monitor employers’ compliance with the request to stop wage garnishment. If your wages continue to be garnished after March 13, 2020, you should contact your employers’ human resources department.

If the Education Department receives funds from a garnishment between March 13, 2020, and the end of the pause, it will refund your garnished wages.

If you have defaulted loans and are in an existing arrangement with a collection agency and would like to continue a prior payment arrangement, consolidate your loans, or begin to rehabilitate your loans, you should call the Education Department’s Default Resolution Group at 1-800-621-3115 (TTY for the deaf or hearing-impaired 1-877-825-9923). Private collection agencies are permitted to provide assistance only upon your request.

For FFEL Program Borrowers With Loans in Default

On March 30, 2021, the Education Department (ED) announced additional relief for borrowers with commercially held FFEL loans by expanding the 0% interest rate and pause of collections activity to borrowers who defaulted on a privately held FFEL Program loan. This relief will be made retroactive to March 13, 2020, the start of the COVID-19 national emergency.

ED says it will work to automatically return any tax refunds seized or wages garnished over the past year. If you’re covered by this expanded relief and you made voluntary payments on any of these loans during the past year, you will now have the option to request a refund of those amounts. You can request this refund through your loan servicer.

The Department will also work with the guaranty agencies, the entities who hold these defaulted FFEL Program loans, to implement the 0% interest rate for these borrowers.

In addition, any of these loans that went into default since March 13, 2020, will be returned to good standing. The guaranty agencies that hold those loans will assign them to the Department and request that the credit bureaus remove the record of default.

If you are a borrower with a defaulted FFEL Program loan and you were pursuing loan rehabilitation and missed a rehabilitation payment during the COVID emergency, that month will still count toward your rehabilitation.

This announcement covers only FFEL Program borrowers whose loans are in default. If you are a FFEL Program borrower with a loan in good standing, this announcement does not apply. However, ED says it is exploring its options for expanding relief to more FFEL Program borrowers.

For Borrowers Eligible for Total and Permanent Disability (TPD) Discharge

On March 29, 2021, ED announced that it will not require borrowers who received a total and permanent disability discharge to submit earnings documentation for the duration of the COVID-19 emergency. This change will be made retroactive to March 13, 2020, the start of the COVID-19 national emergency.

ED will also reverse any reinstatement of loan repayment requirements that occurred during this period because the borrower did not submit earnings information. Impacted borrowers will not be required to later submit documentation of their income for the period covered by the COVID-19 emergency. Borrowers will begin to see their loans return to a discharge status in the coming weeks, including through follow-up communications from their servicer.

ED also said it is considering other future changes to how it monitors earnings for those who receive a total and permanent disability discharge.

If Your Federal Loans Aren’t Covered

You still have options for relief even if your loans are among the small percentage that don’t qualify for the automatic relief provided by Congress or the Education Department.

If you need to stop making your monthly payments for now, you can request an administrative forbearance.

Being in an administrative forbearance means that you can temporarily stop making your federal student loan payments without becoming delinquent.

If you request an administrative forbearance, you will not have any payments due for as long as the administrative forbearance lasts. Your loan servicer will cancel any scheduled auto-debit payments.

After the administrative forbearance ends, you will have to resume making payments. If you wish to use auto-debit, you may restart auto-debit payments; they will not automatically resume.

You could also consolidate your FFEL Program or Federal Perkins loans into a Direct Consolidation Loan, which would be eligible for all the benefits listed above.

However, if you consolidate, and after the 0% interest rate waiver ends, the interest rate may be higher than what you are currently paying, and any outstanding interest will capitalize, meaning that any outstanding interest is added to your principal balance.

Your loan servicer can provide you with information about how your loan balance, interest rate, and total amount paid would change if you consolidated into a Direct Consolidation Loan.

If You Have Private Student Loans

The federal government has not taken any action on behalf of private student loan borrowers. Private student loans include loans made by banks, state agencies, and some colleges and universities.