Posted and up-to-date on 9/20/2023
Introduction
On March 27th 2020 emergency legislation called the CARES Act was signed into law in response to the COVID-19 public health crisis. The law includes some relief for borrowers with federal student loans that are held by the federal government. The protections had been extended multiple times since March 2020, but they ended in September, 2023.
- The pandemic protections did NOT apply to private student loans or to some federal student loans made before 2010 by banks and private lenders.
- To find out if you have a federal student loan, log in through the Federal Student Aid (FSA) website.
- This is a U.S. Department of Education database for student aid. You can look here to find out if you have any federal student loans. This will only give you information about FEDERAL student loans, not private loans.
- You will need your FSA ID and password to log in.
- If you don't know whether you have private loans, check your credit report. Any private loans should show up on your report. You can get one free credit report every year. Request your free credit report online.
Do I have to pay my student loans?
The new law suspends payments on certain types of federal loans until September, 2023.
- Interest started accruing again in September 2023 and payments started back up in October 2023. Until September 30, 2024, there is an “on-ramp” to repayment. This means that you will not fall into default or be sent to a collection agency if you miss payments. Read more about this “on-ramp to repayment.”
What if my wages, Social Security or tax refund was garnished during the payment pause?
The law also suspended forms of involuntary collection for defaulted loans, including wage garnishment, tax offsets and Social Security offsets. In a press release on March 25th, 2020 the Department of Education announced that it would stop garnishments to many student loan borrowers and that offsets that were in the process of being withheld on March 13, 2020 will be refunded to borrowers.
The Department also stated that they will rely on employers to make changes to employee’s paychecks and suggests that borrowers contact their human resources department.
Despite this protection, some collections activity continued. If you had payments collected involuntarily since March 13, 2020 they should be refunded to you.
What if my loans are in default?
The Department of Education has announced a “Fresh Start” plan to help people in default once the payment pause ends. It means that you won’t have to rehabilitate or consolidate to get out of default and get access to income-driven repayment plans, or to go back to school. To see if you’re eligible for Fresh Start, you have to call your loan servicer and ask them about the program. Learn more about the Fresh Start program.
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Updated: May, 2024