Here’s how the timeline has evolved. The Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily paused payments on federal student loans through Sept. 30, 2020. On Aug. 8, 2020, and again on Dec. 4, 2020, President Donald Trump directed Secretary of Education Betsy DeVos to extend the payment pause. On Jan. 20, 2021, President Joe Biden extended student loan forbearance until at least Sept. 30, 2021. This was followed by two more extensions: to Jan. 31, 2022, and then again to May 1, 2022. It extended again on Aug. 24, 2022, this time until Dec. 31, 2022. Then, on Nov. 22, 2022, Biden announced another extension into 2023.
Federal Student Loan Forbearance Extension: What It Means
The CARES Act did three things for federal student loans:
Put loans into automatic administrative forbearanceSet interest rates at 0%Suspended collections on defaulted loans
The original moratorium on interest and payments began on March 13, 2020, and was set to expire on Sept. 30, 2020. There have been seven extensions since then. The most recent extension happened on Nov. 22, 2022, when the Biden administration announced the loan forbearance program will be in place until court cases are resolved in 2023.
Which Federal Student Loans Qualify?
The pause on payments, collections, and interest applies only to certain loans from the Department of Education:
Direct loans, including defaulted and non-defaulted loansFFEL program loans, including defaulted and non-defaulted loansFederal Perkins loans, including defaulted and non-defaulted loansDefaulted HEAL loans
However, HEAL loans that commercial lenders own are not eligible for this program. Perkins loans owned by the school you attended are not paused either. On March 31, 2021, the Department of Education expanded its forbearance relief through Sept. 30, 2021, to include FFEL loans owned by private parties, retroactive to March 13, 2020, which means that if the borrower made payments during the forbearance period, they can request a refund. Any wages or tax refunds garnished by the loan owner will be returned to the borrower. The loans will be restored to good status, and credit bureaus will be notified to remove any black marks for delinquency from your credit report. You can find out which loans you have by logging into your Federal Student Aid account. Once in the menu, select the relevant loans from your dashboard and click “View Details” to see whether the Department of Education owns the loan. If it does, the servicer’s name will start with “DEPT OF ED.” In most cases, interest your loans accrued before March 13, 2020, will not capitalize. If you were already on a deferment or forbearance, interest accrued will capitalize after your forbearance ends, as will interest accrued if you were in your grace period.
What Are My Relief Options if I Don’t Have Qualifying Loans?
If you do not have qualifying loans, your servicer may offer other forms of financial relief. Some of your options include:
Requesting administrative forbearance directly with your loan servicer Determining whether you qualify for economic hardship deferment or an unemployment deferment (both options could result in interest on some loans being subsidized) Refinancing student loans, though this option is best for private student loans (refinancing federal loans would mean giving up important borrower benefits)
If you put non-federal loans into forbearance, your loans will continue accruing interest. You will have a larger balance to repay once your payments resume.
How Will I Know When To Start Making Payments Again?
Your loan servicer should notify you via email or mail before you need to start making loan payments again. You can log into your online account with your loan servicer at any time to see your loan status and to determine whether you have a payment due. However, several major loan servicers that work with the Department of Education have urged their borrowers to keep current on coronavirus relief. You can do that by regularly visiting the Federal Student Aid’s Coronavirus (COVID-19) information page at StudentAid.gov/coronavirus. This page provides updated details on the current policies that are in place. It also is meant to be your primary source for announcements about your loans. It will provide details on whether the payment moratorium will be extended and when loan payments will resume.
