Government Response to COVID-19
In response to the COVID-19 crisis, the government has enacted several changes related to federal student loans held by the U.S. Department of Education to provide struggling borrowers with some temporary relief. These policies do not apply to private student loans. Federal Family Education Loan (FFEL) Program loans owned by commercial lenders and college-owned Perkins Loans do not qualify for CARES Act relief.
Payment Suspension and Interest Waiver
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. As part of the law, all payments on federal student loans have been suspended for six months through Sept. 30 and borrowers will receive 0% interest during this same time frame.
During this period, no interest can accrue, and nonpayment cannot be used to affect borrowers’ credit scores. Further, borrowers will still qualify for monthly payments toward loan forgiveness during this period. The payment reprieve is automatic and effective as of March 13.
Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF)
The six-month reprieve on federal student loan payments will not impact progress made under IDR or PSLF. If your income has been reduced as a result of coronavirus, you can submit a request for a recalculation of your payment on your IDR plan, to lower your payment for the next 12 months based on your reduced income.
Borrowers pursuing PSLF will not have to prove they were working for an eligible employer during the six-month reprieve to receive credit for payment during the period.
The CARES Act signed into law by President Trump on March 27, 2020 suspends collection actions and wage garnishments for six months through Sept 30. All tax refund offsets, Social Security offsets and administrative wage garnishments also are suspended during this time.
During this time, borrowers can continue to work with collection agencies to complete rehabilitation programs to move their loans out of default. Doing so now will allow defaulted borrowers to take advantage of the CARES Act payments reprieve through Sept. 30. Borrowers who set up a rehabilitation plan with their collection agency prior to Sept. 30 will have any remaining months of the government-mandated payment reprieve count toward the required nine months of on-time payments to rehabilitate their loans even if they are unable to make payments. For example, borrowers who set up a rehabilitation plan in June will receive credit for four months (June, July, August and September) toward their rehabilitation plan.
If you are experiencing additional financial stress at this time, we encourage you to review our COVID-19 financial resources.
What to Do If Your Student Loans Don't Qualify for COVID-19 Relief
Certain federal loans are excluded from this relief. They are:
- Federal Family Education Loan (FFEL) Program loans owned by commercial lenders
- College-owned Perkins Loans
Many borrowers may not even realize their loans don’t qualify. That’s why it’s important to contact your loan servicer(s) directly to confirm whether or not your loans are eligible for the federal relief. If they’re not, there are alternatives that may be able to help. Borrowers also can contact us to review repayment solutions.
Consolidate Your Debt
If you have FFEL or Perkins loans that aren’t covered, consider consolidating them into a federalDirect Consolidation Loan. This moves ownership of the loans back under the Department of Education and would then qualify them for CARES Act loan relief. There are some things to take into consideration with this approach, however.
Think of consolidating your loans as a “restart.” If you are currently enrolled in a loan forgiveness program, you would lose credit for any progress you’ve made toward reaching the payment threshold. If you have Perkins loans, you would lose the option of cancellation programs unique to those loans. And finally, the consolidation could leave you with a slightly higher interest rate after the payment suspension period.
Apply for Deferment or Forbearance
Both FFEL and Perkins loans should qualify for traditional deferment or forbearance programs, which will buy you time to catch up financially.
If you have FFEL loans, ask your lender about applying for unemployment or economic hardship deferment. Keep in mind that during the months you’re not making payments, interest may still accrue.
Perkins loans borrowers have the option of unemployment or economic hardship deferment, with the added benefit of a 6-month grace period before payments are due again. Plus, no interest will accrue during this time.
Private Student Loans
Government action on federal student loans does not apply to private student loans. But a number of private loan lenders are offering some form of assistance to borrowers. Here is a list originally compiled by Business Insider of 25 private student loan lenders and what they are doing to help during this time. If your lender is not listed, we encourage you to reach out directly to ask about any assistance programs for people impacted by the ongoing crisis.
Access Group is handling payment assistance on a case-by-case basis. Contact Firstmark (Access Group's servicer) to discuss forbearance options. Learn more about Access Group's response to COVID-19 here.
Advantage Education Loan
If you've been financially impacted by the coronavirus, Advantage Education Loan is offering disaster forbearance for up to 90 days for borrowers financially impacted by the coronavirus. Call 1 (800) 693-8220 to set up forbearance. Learn more about Advantage Education Loan's response to COVID-19 here.
Ascent Student Loans
Ascent launched a new Natural Disaster/Declared Emergency Forbearance program for those who have been impacted by the coronavirus. You can apply for forbearance for up to three months by contacting Ascent's student loan servicer, Launch Servicing. Unlike Ascent's other forbearance programs, the Natural Disaster/Declared Emergency Forbearance program doesn't count toward your 24-month forbearance limit. Learn more about Ascent's response to COVID-19.
Brazos Higher Education
Brazos Higher Education offers disaster forbearance for up to 12 months in three-month increments. Interest will continue to build during this time. Call your servicer to set up the forbearance verbally. Learn more about Brazos' response to COVID-19 here.
Borrowers can apply for payment assistance through Citizens Bank for up to 90 days. You will not pay late fees, and the bank will not report late or missed payments to credit bureaus. Learn more about Citizens Bank's response to COVID-19 here.
Borrowers may qualify for disaster forbearance through College Ave for up to three consecutive months, but interest will continue to accrue. If you're already enrolled in auto pay, you will keep receiving the auto pay interest rate discount even while payments are paused. To enroll in disaster forbearance, send an email to firstname.lastname@example.org. College Ave is aiming to respond to these emails within five business days. Learn more about College Ave's response to COVID-19 here.
You can apply for natural disaster forbearance through CommonBond. Your student loan forbearance will last as long as the coronavirus is declared a national emergency. Interest will keep accruing, but CommonBond will waive late fees. Learn more about CommonBond's response to COVID-19 here.
Discover is offering payment assistance for private student loans, but the company has not published details. Call 1 (800) STUDENT to speak with a representative. Learn more about Discover's response to COVID-19 here.
You can apply for disaster forbearance through Earnest for up to three months, but interest will continue to accrue. You can expect to hear back within 10 business days after you submit your request. Learn more about Earnest's response to COVID-19 here.
Education Loan Finance
Education Loan Finance offers student loan payment assistance on a case-by-case basis. You can call 1 (844) 601-ELFI or email answers@ELFI.com to discuss your situation. Learn more about Education Loan Finance's response to COVID-19 here.
First Tech Federal Credit Union
First Tech is providing payment assistance on a case-by-case basis. You can submit a loan modification request online and check "other" when selecting which type of loan you're referring to. Learn more about Education Loan Finance's response to COVID-19 here.
HESAA has split payment assistance programs into three categories:
- If you've contracted the coronavirus, apply for temporary total disability assistance.
- If you’ve lost your job, apply for unemployment assistance.
- If you've faced financial difficulties due to the coronavirus in some other way, apply for financial hardship assistance.
iHelp is providing national emergency forbearance if you have not already defaulted on your student loans. Contact your iHelp representative to discuss your financial situation. Learn more about iHelp's response to COVID-19 here.
You may qualify for a payment extension or forbearance through Laurel Road. You can call MOHELA (Laurel Road's servicer) at 1 (877) 292-6845 to discuss payment options. Learn more about Laurel Road's response to COVID-19 here.
Lendkey is handling payment assistance on a case-by-case basis. Contact the team by emailing email@example.com. Learn more about LendKey's response to COVID-19 here.
MEFA is offering payment assistance but does not provide details on its website. You can call MEFA's servicer, AES, at 1 (800) 233-0557 to discuss your financial situation. Learn more about MEFA's response to COVID-19 here.
If you have private student loans through Navient, you can request disaster forbearance for up to three months. Remember that interest will continue to accrue during the forbearance period. You may apply for Navient's Rate Reduction Program, which decreases your interest rate and monthly payment. Or you can ask Navient about its Interest Only Program or Extended Repayment Program. Learn more about Navient's response to COVID-19 here.
Navy Federal Credit Union
Navy Federal Credit Union is offering forbearance for up to three months, although interest will continue to accrue. Discuss your situation with a representative by calling 1 (877) 304-9302. Learn more about Navy Federal Credit Union's response to COVID-19 here.
You can apply for forbearance for up to three months through Prodigy Finance, but interest will continue to accrue. If you were on time or ahead of schedule with your payments before applying for forbearance due to the coronavirus, Prodigy will keep reporting your payments as on time to credit bureaus. You can contact Prodigy about forbearance by sending an email to firstname.lastname@example.org. Learn more about Prodigy's response to COVID-19 here.
RISLA hasn't published details about payment assistance, but you can contact a representative at 1 (888) 758-7562 to discuss your options. Learn more about RISLA's response to COVID-19 here.
Sallie Mae is offering payment assistance for those affected by the coronavirus. You can speak to an agent about your options via online chat. Learn more about Sallie Mae's response to COVID-19 here.
SoFi encourages you to apply for deferral if you can't make your next payment. If you continue to face financial hardship, the company will work with you to continue assistance. Remember that interest will continue to accrue and the term of your loan will lengthen. Learn more about SoFi's response to COVID-19 here.
Truist (previously SunTrust)
You may be able to pause student loan payments for up to 90 days through Truist. If you previously took out a loan through SunTrust, you can request payment assistance here. Learn more about Truist's response to COVID-19 here.
You may qualify for a 90-day deferral through Wells Fargo if you have been impacted by the coronavirus. Bank representatives are available to discuss other assistance options, including longer-term deferrals. Wells Fargo isn't charging late fees during this time, and the bank will not report missed or late payments to credit bureaus. Learn more about Wells Fargo's response to COVID-19 here.