What You Need to Know about Student Loans
THE STUDENT LOAN PAYMENT PAUSE IS EXTENDED UNTIL THE LITIGATION OVER THE PROGRAM IS RESOLVED.
This page will help you prepare to make student loan payments and explain how you can discharge your student loans, if eligible.
Why and when is federal student loan relief ending?
The CARES Act provided broad relief for federal student loan borrowers. Since March 27, 2020, all payments on federally-held student loans have been paused and the interest rate on federal student loans set to zero percent.
The White House and Department of Education previously announced a final extension of the pause on federal student loan repayment, interest and collections through December 31, 2022.
However, the student loan payment pause has been extended until the U.S. Department of Education is permitted to implement the debt relief program or the litigation is resolved. Payments will restart 60 days after the litigation is resolved. If the debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that. The Department of Education will notify borrowers before payments restart.
The pause includes the following for eligible loans:
- a suspension of loan payments
- a 0% interest rate
- stopped collections on defaulted loans
This “administrative forbearance” allows you to temporarily stop making your monthly loan payment, although you can still make payments if you choose. Recovery of student loan debt from Social Security benefits is suspended during this period.
The U.S. Department of Education has prepared commonly asked questions and answers regarding student concerns, financial aid and student loans including zero interest, forbearance and defaults, as well as additional resources.
Is there a way to discharge my federal student loan if I have a documented disability?
Yes. The Department of Education (ED) announced final regulations that streamline and improve the rules for major targeted debt relief programs. The regulations expand eligibility, remove barriers to relief, and encourage automatic discharges for borrowers who are eligible for loan relief because their school closed, they have a total and permanent disability, or their loan was falsely certified.
These rules will go into effect July 1, 2023, which is the effective date specified in the Higher Education Act for regulations issued on or prior to November 1 of a given year.
The final rule provides additional pathways for borrowers to receive a discharge based upon a disability determination made by the Social Security Administration (SSA).
Borrowers who do not qualify for a discharge due to an SSA determination will be able to submit additional forms of documentation to the Department to more easily obtain approval through the Total and Permanent Disability certification process by allowing additional types of medical professionals to sign the necessary paperwork. For borrowers who do receive a discharge, the final rule eliminates the three-year income-monitoring requirement.
Is there a way to discharge my federal student loan if I am employed by a U.S. federal, state, local or tribal government or not-for-profit organization?
Yes. You might be eligible for the Public Service Loan Forgiveness Program (PSLF program) if you work or have worked in public service such as government service (federal, U.S. Military, state, local, or tribal) or certain non-profit organizations, you might be eligible for the Public Service Loan Forgiveness (PSLF) Program.
The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. However, you will need to take steps to apply. Use the Public Service Loan Forgiveness (PSLF) Help Tool to walk you through the steps to determine if you qualify, how to apply and meet all the requirements.
What do I need to do before the student loan payment pause ends?
Before payments resume, the Department of Education advises that you:
- Update your contact information with your loan servicer and in your StudentAid.gov profile. Make sure they have the correct info!
- Check out the ED’s Loan Simulator to explore options for repaying your student loans.
- Consider applying for an income-driven repayment (IDR) plan to make your payments more affordable.
- Sign-up to receive Federal Student Loan Borrower Updates from the Department of Education
What can I do if I am not financially able to make my student loan payments when the payment pause ends?
Paying off student debt can be scary and confusing. If you do not feel financially secure enough to make your student loan payments, talk with you loan provider about repayment plan options. Instead of having a traditional repayment plan, you might qualify for an Income-Driven Repayment Plan, like Pay As You Earn Repayment (PAYE); Income-Based Repayment (IBR); and Income-Contingent Repayment (ICR) Plans.
An important note: Before switching from a traditional repayment plan to an income-driven repayment plan, make sure that you understand how making lower payments might affect your loan interest and the length of time that you will need to make payments.
Where do I find a list of forms to help me apply for loan relief or discharges I may be eligible to receive?
A list of financial student aid forms are available from the Office of the U.S. Department of Education. You may download the forms manually, but if the form is available electronically and a link is provided, it is highly recommend to complete the online version for efficiency and faster processing and response times.
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The Financial Resilience Center was developed by National Disability Institute with generous funding from the Wells Fargo Foundation.