Under the CARES Act, Congress paused payments on most federal student loans due to the ongoing COVID-19 pandemic. President Trump and President Biden both extended the federal student loan payment pause multiple times. The payment pause is now over, as it ended on September 1, 2023. This means that student loan interest has now resumed. Borrowers with federal student loans will get their first bills on their loans in more than three years beginning in September, and payments will be due starting in October 2023.
The Department of Education’s webpage about the COVID-19 relief provides more information about the payment pause, as well as advice for preparing for repayments to resume.
- Which loans were eligible for the payment pause?
- Did interest accrue during the payment pause?
- Will the payment pause count toward IDR and PSLF Loan Forgiveness?
- Did I have to recertify my IDR plan during the payment pause?
- Did collection continue on my student loans during the payment pause?
- What if my loans were not covered by the payment pause?
Which loans were eligible for the payment pause?
The payment pause applied to all federal student loans held by the Department of Education, including:
- Direct Loans,
- Defaulted FFEL loans,
- And any other federal student loans that are currently held by the Department of Education,
The payment pause did not apply to private student loans. It also did not apply to borrowers with commercially-held Federal Family Education Loans (FFEL) that are not in default and school-held Perkins Loans. To get more information on finding out if your loan is held by the Department of Education or a commercial lender, visit our page on loan holders.
Did interest accrue during the payment pause?
No. The interest rate was lowered to 0% for all eligible loans during the payment pause through the end of August 2023. This means interest was not charged on covered loans during the suspension and your student loan balance should not have grown during this time. Some borrowers were able to take advantage of the 0% interest rate and pay down the principal balance of their loans while the payment pause was in effect.
Will the payment pause count toward IDR and PSLF Loan Forgiveness?
Yes. The months spent in the payment pause will count towards IDR and PSLF Forgiveness. But you have to take steps to make sure that you are otherwise eligible for IDR and PSLF Forgiveness. See our page on IDR cancellation and PSLF for more information and to make sure you are on track for loan forgiveness.
One-time Adjustments to Help Borrowers Qualify for IDR and PSLF
The Department of Education is conducting a one-time adjustment of borrowers accounts to give more borrowers credit toward IDR and PSLF loan forgiveness. This adjustment will happen automatically for most borrowers, but there may be a few steps you need to take to make sure you get credit toward loan forgiveness. See our page on the one-time account adjustment for more information.
Did I have to recertify my IDR plan during the payment pause?
If you were enrolled in an IDR plan before the pandemic, you do not need to recertify again until at least six months after the payment pause ends (April 2024). This date may change. Your loan servicer will contact you about recertifying. You can recertify early if you have experienced a decrease in income and want to see if you can get a lower payment now.
Did collection continue on my student loans during the payment pause?
No. During the payment suspension, no collection activities should have occurred on loans in default that were covered by the payment pause. This means there should have been no collection calls, no wage garnishment, and no money taken out of your tax refunds or Social Security benefits to collect on your defaulted loans. Now that the payment pause has ended, collection will not begin right away for most borrowers because of the Department of Education’s Fresh Start program. For more information about this program, including how to quickly and easily get your loans out of default through this program to prevent future collection, see our page on Fresh Start.
What if my loans were not covered by the payment pause?
If you had a federal student loan that was not covered by the payment pause, such as a commercially-held FFEL Loan or a Perkins Loan, you may have been able to consolidate your loan into a Direct Loan program to be eligible for the payment suspension and interest pause.
There are other benefits to consolidating your loans, even now that the payment pause has ended. If you consolidate your loan, you might also be eligible for other benefits such as a better IDR plan. There are downsides to consider before you consolidate, and some borrowers are not eligible to consolidate. Borrowers can learn more about the pros and cons of consolidating as well as how to apply for one on our consolidation page.
Get ready to return to repayment on your student loans, visit our page on Return to Repayment.