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What We Do Student Loan Repayment During COVID

Student Loan Repayment During COVID

Information & Resources for Borrowers During COVID:

*On August 24, 2022 President Biden announced a plan to cancel tens of millions of dollars in student debt—and extended the payment pause on federally owned student loans through December 31, 2022!*

See our FAQs about President Biden’s announcement here.

Biden’s plan includes cancelling $10,000 in federal student loan debt for student loan borrowers with individual incomes less than $125,000 ($250,000 for married couples or heads of household), with an additional $10,000 ($20,000 total) in cancellation if those borrowers received a Pell Grant at any time to help fund their education.

President Biden also announced an incoming new Income-Driven Repayment (IDR) plan—which will lower payments for undergraduate loans, setting payments at 5% of discretionary income, and redefining that to mean any income above 225% of the federal poverty level. This plan is not currently available, and the Department of Education (ED) has not released more information.

The federal student loan payment pause is also extended—to December 31, 2022. You should receive a monthly statement at least 21 days before your next payment is due. The pause covers tens of millions of borrowers. Unfortunately, millions more with private student loans and federal loans owned by private companies are left without relief. The SBPC will continue to advocate for meaningful relief for all borrowers.

More Info on the Payment Pause:

In April 2022, President Biden re-extended the payment suspension on federal loans owned by ED through December 31, 2022.

The protections offered under the payment pause extension only apply to federal loans owned by ED (i.e., Direct Loans and ED-held FFELP Loans).

Commercially held FFELP loans, Perkins loans, and private student loans are not covered under the law. These loans have had payments due since March of 2020.

If you have federal student loans owned by ED, you will receive the following protections through December 31, 2022:

  • All payments will be suspended on covered federal student loans. Your student loan servicer will automatically suspend all payments due. You are NOT required to take any action to have the payment suspension applied to your loans.
  • Borrowers will continue to receive credit towards loan forgiveness. During the payment suspension, you will continue to receive payment count credit toward Public Service Loan Forgiveness (PSLF) and IDR relief, as long as you meet all the other requirements to receive credit. See here for information about Biden’s temporary PSLF Waiver and here to learn about the IDR Account Adjustment.
  • Interest rates on eligible federal loans will be reduced to zero percent. The interest rate on all of your eligible federal student loans will be reduced to zero percent, and this interest rate reduction will be backdated to March 13, 2020. Any payments made after March 13, 2020 will be applied to any previously accrued interest, and then to your principal balance.
  • Collection activities on covered loans will be on pause for the duration of the payment suspension. If your loan is in default, all collections activity, including wage garnishment, federal benefit offsets, and federal tax refund offsets. If you are currently in garnishment, you will need to contact your employer directly to ensure the garnishment is paused.
  • You can find additional information on the Federal Student Aid website:

    Note: IDR recertification dates that occur during the payment suspension period have been extended by six months

Complaint Portal:

The Consumer Financial Protection Bureau has a portal that borrowers can use to submit complaints about student loan payments. Use it!

State-Based Resource List for Borrowers:

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