Posted and up-to-date on 9/20/2023
On March 27th 2020 emergency legislation called the CARES Act was signed into law in response to the COVID-19 public health crisis. The law includes some relief for borrowers with federal student loans that are held by the federal government. The protections have been extended multiple times since March 2020, but they ended in September, 2023.
- The pandemic protections do NOT apply to private student loans or to some federal student loans made before 2010 by banks and private lenders.
- To find out if you have a federal student loan, log in through the Federal Student Aid (FSA) website.
- This is a U.S. Department of Education database for student aid. You can look here to find out if you have any federal student loans. This will only give you information about FEDERAL student loans, not private loans.
- You will need your FSA ID and password to log in.
- If you don't know whether you have private loans, check your credit report. Any private loans should show up on your report. You can get one free credit report every year. Request your free credit report online.
Do I have to pay my student loans?
The new law suspends payments on certain types of federal loans until September, 2023.
- The suspension applies to many, but not all, federal student loans.
- The suspension does not apply to private student loans.
- The suspension is supposed to happen automatically, without the need for student loan borrowers to contact their servicers to request the suspension.
- The suspension of payments is different from requesting a forbearance.
- If your loans are covered by the pandemic protections but you have still made some payments since March 13, 2020, you can request from your loan servicer that those payments be refunded.
- Even though interest starts accruing again in September 2023 and payments start back up in October 2023, there will be an “on-ramp” to repayment over the next year. This means that you will not fall into default if you miss payments. Read more about this “on-ramp to repayment.”
Will I still be charged interest on my loans?
Not while the payment pause is still in effect. If you have federal student loans that are suspended under this law, they won't gather interest during this time. But interest will start accruing again in September 2023.
For FFEL loans in default and not held by the federal government, this relief will apply retroactively to March 13, 2020. This means that any interest gathered since March 13, 2020 should be removed from your balance.
Will the suspension of payments impact my eligibility for Public Service Loan Forgiveness?
The months in which loan payments are suspended will be treated as qualifying payments toward loan forgiveness, as long as you are still eligible. You will still need an Employment Certification form and must still be employed full-time with a qualifying employer.
The federal government recently made changes to Public Service Loan Forgiveness. Learn more about PSLF and recent changes.
I am currently in a rehabilitation plan for a defaulted loan. How will the suspension of payments affect the status of my rehabilitation?
The months in which loan payments are suspended will be treated as payments toward an authorized rehabilitation plan. If you can afford to make your payments toward a rehabilitation plan, you can still make those payments.
Can my wages, Social Security or tax refund still be garnished?
The law also suspends forms of involuntary collection for defaulted loans, including wage garnishment, tax offsets and Social Security offsets. In a press release on March 25th, 2020 the Department of Education announced that it would stop garnishments to many student loan borrowers and that offsets that were in the process of being withheld on March 13, 2020 will be refunded to borrowers.
The Department also stated that they will rely on employers to make changes to employee’s paychecks and suggests that borrowers contact their human resources department.
Despite this protection, some collections activity continued. If you had payments collected involuntarily since March 13, 2020 they should be refunded to you.
What if my loans are in default?
The Department of Education has announced a “Fresh Start” plan to help people in default once the payment pause ends. It means that you won’t have to rehabilitate or consolidate to get out of default and get access to income-driven repayment plans, or to go back to school. To see if you’re eligible for Fresh Start, you have to call your loan servicer and ask them about the program. Learn more about the Fresh Start program.