Are all student loans on hold?
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Updated 3:17 p.m. UTC Aug. 10, 2023
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Many federal student loans are on hold through at least the end of September 2023, but certainly not all of them. Federal student loan repayment was paused for millions of eligible borrowers, beginning in March 2020, at the onset of the coronavirus pandemic. This postponement has been extended eight times by the Biden Administration.
However, with the Supreme Court’s ruling against the Biden-Harris Administration’s federal student loan debt relief program on June 30, 2023, this administrative forbearance will be coming to a close. Interest is set to resume accruing on federal student loans on Sept. 1, 2023, and payments will start in October 2023.
Meanwhile, ineligible federal loan borrowers, plus private loan holders, have not had their education debt on hold at all during the pandemic.
Here’s the latest on where student loan repayment stands and what steps you can take to prepare for the resumption of payments or optimize your current bills.
Forgiveness is still possible, depending on where you live. These states offer their own student loan forgiveness plans.
Laurel Road
Which student loans are on hold?
As with all things student loans-related, there is fine print. Not all student loans are on hold. Not even all federal student loans are on hold.
Here’s a list of which loan types are eligible and ineligible for the federal loan repayment suspension.
| ELIGIBLE | INELIGIBLE |
|---|---|
Federal loans held by the government
| Federal loans not held by the government (such as Perkins Loans lent by your school or Federal Family Education Loans owned by a guaranty agency)
|
Private or alternative loans held by financial institutions or state-run financing authorities
|
Besides paused payments and interest charges, there are other benefits of the repayment suspension. If you were late on your loan payments, the pause also stipulates:
- Garnishment of wages will not take place.
- Federal payments (such as tax refunds and Social Security benefits) will not be withheld.
- Collection calls will stop.
- Billing statements will not be mailed.
How long are student loans on hold?
Congress passed the pandemic-inspired CARES Act, which initially brought repayment to a halt in March 2020. The latest student loans extension takes eligible borrowers through the end of September 2023. Specifically, interest will begin accruing on Sept. 1, 2023, while payments will resume in October 2023.
Federal student loans have remained on hold because of a few factors. These include:
- The COVID-19 pandemic crunched borrower finances, making it unrealistic for many to afford their monthly dues. Elected officials in Washington feared a dramatic uptick in student loan delinquency and default that would further affect the economy.
- The federal government needed more time to manage communication between borrowers and their federal student loan servicers — the third-party contractors that manage repayment on behalf of the government — particularly given the fact that some of these servicers (such as Navient) exited the industry and newer companies were brought aboard.
- Increased public and political debate around mass student loan forgiveness has continued. The Biden-Harris Administration announced a federal student loan debt relief program on Aug. 24, 2022 — however, it was since ruled against by the Supreme Court on June 30, 2023. The federal student loan pause was extended to provide time for this litigation to be settled.
What to do if your student loans are — or aren’t — on hold
The federal loan repayment suspension was enacted automatically. As a borrower, you didn’t have to apply for the so-called administrative forbearance to receive it. That said, you can log in to StudentAid.gov or contact your federal loan servicer to confirm your eligibility.
If your loans are on hold
Even if your payments aren’t due in the short term, you might have longer-term concerns about fulfilling your debt obligations. Here are some tips for a variety of scenarios.
If budgeting is a struggle …
Take care of your most pressing needs (such as housing and food) and, as possible, refill your rainy day savings.
If you’re worried about affording payments when the moratorium ends …
Consider an income-driven repayment (IDR) plan that caps your monthly dues at a percentage of your income. If you’re already enrolled in an IDR plan, you can now self-report your income to lower your payments further under the Education Department’s new rules.
If you’re experiencing hardship …
Look into deferment and forbearance options that could keep an interest-accruing pause on your payments once the mass moratorium expires. If your servicer isn’t helpful in talking through these options, it could be worth consulting a credit counselor.
If your loans are delinquent or in default …
Talk to your federal loan servicer about rehabilitating your accounts. Nonpayments during the moratorium count toward the requirements for getting your loan “current” again.
If you have the ability to make voluntary payments …
It could make sense to submit optional payments toward your paused debt if your balance is relatively low. That’s because, with interest rates temporarily at zero, 100% of your voluntary payment would go toward the principal on your outstanding balance, helping you to whittle it down faster.
Tip: Beyond reviewing repayment options with your loan servicer, also take steps to ensure you can pick up where you left off once the moratorium ends, says Leslie Tayne, a New York-based debt attorney who previously battled her own student loans. “It’s also a good idea to check autopay settings to reenroll in the payment option and ensure bank account information is accurate and up-to-date,” she says.
If your loans aren’t on hold
Even if you haven’t previously benefited from loan payments and interest being paused, there are ways to become eligible or to get help in other ways. Consider the following strategies to make sure you don’t fall behind on your debt.
If you have ineligible federal loans …
Ask your federal loan servicer about a Direct Consolidation Loan. By grouping your ineligible federal loans into one new government-held debt, you could gain access to the moratorium through September 2023, plus programs like IDR. Just be wary of consolidating, as it could reset your repayment progress toward programs like Public Service Loan Forgiveness.
If you’re worried about keeping pace with repayment …
Contact your private lender or loan servicer and request information about relief options they might offer. Some banks, credit unions and online companies might allow you to temporarily reduce your rates or payments. For federal loans, ask your federal loan servicer about deferment and forbearance options.
If you work for a generous employer …
Open a conversation with your human resources representative. Mention the fact that Congress made it easier for employers to match student loan payments without a negative tax effect on employees, at least through 2025.
If your finances are in good shape …
Gauge your potential fit for student loan refinancing — that is, consolidating your debt with a private lender at ideally better repayment terms. If you’re creditworthy enough to qualify for a lower APR elsewhere, it could save you hundreds or even thousands of dollars in interest. Give a second thought to refinancing federal loans, however, as long as mass student loan forgiveness remains a possibility. (Private loan forgiveness is generally not possible, making it less risky to refinance private loans.)
Tip: Keep in mind that if you decide to apply for an IDR plan or deferment or forbearance after the moratorium ends, interest will continue to accrue onto your debt. Also, your credit report will note these changes in your repayment, potentially affecting your credit score.
Frequently asked questions (FAQs)
If you’re unsure whether you have federal or private student loans, you have a few options.
- Log into StudentAid.gov. You’ll need your federal student aid (FSA) ID to log in. Select “My Aid” to see information about all federal aid you’ve received, including federal student loans. If your loans aren’t listed, they’re privately held.
- Review documentation. You can check any promissory notes, applications or billing statements that you have. If you have a federal loan, these documents will provide the name of the federal loan program your loan falls under. If there’s no federal program listed, the loans are private.
- Contact your servicer or lender. Reach out to whichever company holds your loans to see if they’re federal or private.
- Check your credit report. If you’re not sure how to contact your servicer or lender, you can also review your credit report, which you can access for free once per year through a site like AnnualCreditReport.com. You’ll find all of your student loans listed under “installment loans” along with which servicer or lender holds them.
Federal student loan payments are set to resume either 60 days after June 30, 2023, or 60 days after the Supreme Court decides on the legality of the Biden-Harris administration’s student loan forgiveness program. Note that this date could change depending on the Court’s ruling.
If you’ve applied for student loan forgiveness through a federal program — such as Public Service Loan Forgiveness or Teacher Loan Forgiveness — your loan servicer will let you know if your application was approved. You can also check your credit report; if your loans were forgiven, they’ll show as being paid in full.
Forgiveness under the Biden-Harris administration’s student debt relief program is currently tied up in litigation and hasn’t proceeded. If you previously applied for the program (the application has since been closed), the Department of Education should have let you know whether you were approved. Whether the forgiveness happens will depend on the Supreme Court’s ruling.
Note that unfortunately, private student loans aren’t eligible for federal loan forgiveness programs.
Federal student loan payments are on hold until at least 60 days after June 30, 2023. Private student loans, on the other hand, are ineligible for this federal administrative forbearance, so payments have not been paused.
If you’re unsure which type of loan you have and whether your payments have been postponed, be sure to reach out to your servicer or lender to check.
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