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 Financial Impact of the Coronavirus

We've been sharing the U.S. Department of Education's flexibilities for federal student loan borrowers. Understanding these options can help you make more informed decisions about paying your bills and prioritizing your debts. The benefits have now been extended again.

So, just to recap, what does this mean for you if you have a federal student loan?

  1. This program gives temporary payment relief to borrowers with qualifying federal student loans. But some federal student loans don’t qualify – for example, older Family Federal Education Loan (FFEL) program loans or Perkins Loans that are owned by the school you attended. Contact your federal loan servicer online or by phone to find out if your loans are eligible.
  2. If your federal loans are covered, the U.S. Department of Education has automatically placed your loans into what’s called “administrative forbearance.” That means you can stop making payments on those loans right away. If your payments automatically come out of your bank account, check if any payments have been processed since March 13, 2020. If they have, you may be able to get a refund as part of administrative forbearance.
  3. If you want to keep making payments on your qualifying federal student loan, the interest rate is now 0%. So any payments you make during the forbearance period may help you pay off your debt faster. If you’re on an income-based repayment program and/or a forgiveness program, you should check out Federal Student Aid's Coronavirus page to see which option makes sense for you.
  4. If your federal student loans are in default, the U.S. Department of Education has stopped making collection calls, and sending letters or billing statements through the end of the pause. And if your federal loans were in default and your employer continues to garnish your wages, you’ll get a refund.

This program only applies to federal student loans. Not sure what kinds of student loans you have? Here are two things you can do to find out:

  • Get a complete list of your private and federal student loans by pulling your credit report. (In fact, you can get your report for free every week through December 2023 due to the COVID-19 pandemic.) Read through it and find your student loans, taking note of the companies that are your lenders or loan servicers. Compare it to the full list of federal loan servicers found here.
  • Confirm which of your loans are federal. Log into FSA or call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

One more thing: you don’t need to hire a company to help you get this student loan payment relief. The program is already in place and there’s nothing you need to do to enroll.

Updated November 23, 2022 to reflect the extension of the student loan payment pause. Visit the U.S. Department of Education to learn more.

Updated Sept. 23, 2022 to reflect the extension of weekly free credit reports through December 2023.

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41 Comments


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Idgirl
May 04, 2020
Hello, are the federal loan companies allowed to mark your federal loans (that fall under this) as in deferment to the credit bureaus? My understanding was that they were supposed to report to bureaus as they normally would, not mark as deferred. Thank you!
Dmmlaw
May 04, 2020
Fyi, it's a gsl loan in default I have paid monthly on since 2018 and every month prior to that except a default in 97. The second default was A short default during irma Where I didn't get reduced to zero income proof in timely after destruction of my entire community And when I called to reinstate I was told I could NEVER EVER REINSTATE No matter payments And would stay in default no matter. I have paid monthly since 2018 anyway hoping for a change in that dumb policy
1234
May 26, 2020

In reply to by Dmmlaw

It happened to me . I paid 2000 like 7 times. Up to this date i have to ask for a letter to be able to process financial aid. That was an error from the institution that processed my loan in 2 different campuses
Liv Fri
August 30, 2021

In reply to by 1234

Any idea on how we can navigate through the mound of debt they put on use to see what was imposed by corrupt service providers? The balance on my loans has tripled, the serving companies have changed, payments not applied, pushed to default, tax refund of 8 K taken. but the balance is triple what was borrowed and it is not right and I cannot get answers.
GA-Former-Student
May 04, 2020
This is useful if you are in a position to make the payments anyway. I am paying down other debt with the money I would have spent on student loans. I haven't been laid off yet, but it's good here to assume the worst.
Ksan27
May 04, 2020
I think this is good for the students
Cb40
May 07, 2020

In reply to by Ksan27

Sadly it is not. people should check their credit score. It showed up as a non-payment since May. Unbelievable
lt2020
May 14, 2020

In reply to by Cb40

same for me. I worked hard to improve my credit and just saw a 18 point drop in my credit score because of this. Just doesn't seem right when we are struggling right now. :(
Conradn
September 14, 2020

In reply to by Cb40

that's why mine dipped. anyway we can contest it?
Cb40
May 07, 2020
Yea great information. However, I just noticed my credit report. Since the refunded and stopped the payments, it now affects my credit score negatively.
AndrewD
May 10, 2020
So I just saw that my student loan went into administrative forbearance (without my consent) and Equifax tanked my credit score 53 points. Doesn’t sound like an intended consequence of this policy. Pretty insane that Equifax wouldn’t have thought this through, but if this is widespread, I can’t imagine how that’ll impact the broader economy as a whole, especially as lending standards get more stringent.
DawnBicker
May 11, 2020
Is this why my credit score went down? I’m on the IBR plan.
Phylactery
May 17, 2020
My TransUnion score dropped 58 points, Equifax by 47, and my student loan balance went up by $320 after taking advantage of this opportunity and continuing to pay down my loans while no payments are due! No payments, no interest, and yet, after making a substatianal payment, my balance went up? Even in times of "forgiveness" this system is messed up and predatory.
ellwood
May 26, 2020
except that your credit score still takes a hit during these times, mine went down 40 points.
Isaac
August 02, 2020
So here it says that we can make payments while in 0% interest, but other places it says the 0% interest will be removed. Could anyone clarify?
Jim Bob
September 14, 2020

In reply to by Isaac

The interest rate will remain at 0%. So 100% of payments made through 12/21/2020 will be applied to principle.
Lukas
September 16, 2020

In reply to by Isaac

Hello, I suppose you should check with your specific Federal loan provider. However, I've been making manual payments throughout the administrative forbearance period and have not incurred any interest on my Federal loans throughout that time.
Annette
September 04, 2020
I returned the checks the treasury sent me. It was my federal taxes and 1 months payment that was taken for my default student loan. I sent them back because they were Uncashable. I was told by the treasury I would be getting new checks around the first of August. Ive still not received them. Im also not the only one that had these issues.
Jim Bob
September 14, 2020
I have my own question. I opted to continue making payments via autopay during the initial administrative forbearance period. Now that it's been extended, do I need to make a second request to continue my payments via autopay through 12/31/2020?
marie77
September 15, 2020
What if I completely paid my federal student loan after March 13th and they refunded all my money back am I going to have to pay that money back eventually??
Pepper
September 16, 2020
This is misleading. It depends on what prefix is before your federal loan. Not that we have a choice in what loans are given, but certain prefixes on federal loans disqualifies them. For example, I have loans with an E before the number and those are in this program, but my loans with J are not. As I literally paid back the cost of my education years ago, I am still just paying interest on these loans. It's abhorrent. All loans should be canceled - why is the government making money off of students?
FTC Staff
October 29, 2020

In reply to by Pepper

the blog explains that the CARES Act gives temporary payment relief to borrowers with qualifying federal student loans. But some federal student loans don’t qualify – for example, older Family Federal Education Loan (FFEL) program loans or Perkins Loans that are owned by the school you attended. Contact your federal loan servicer online or by phone to find out if your loans are eligible. 

Lukas
September 17, 2020
Pandemic or not, Federally-backed student loans should have a 0% interest rate!
GOODNEWS OMO
September 18, 2020
Thank u for this information because someone just sent me a message saying ftc is send 25000 each to Nigerians because of covid-19
Don't use your…
October 08, 2020
DEAR SIR PLEASE HELP ME.
Anani
November 04, 2020
All being said and done, great idea to have my federal student loans go into administration forbearance, even though it dipped my credit score a bit. Question; is it advisable to refinance my loan loan with a private bank with a lower interest rate (4.49%) as against (6.875%) currently?
caramelskye
November 24, 2020
Can the CARES Act allow employers to give employees a break on their student loans? Up to 5,250 paid out by the employer tax free to pay off fed student loans.
slobrian
December 03, 2020
I had a federal loan with Sallie Mae which was sold to Navient & converted to a private loan without my knowledge. I found this out when I called about the temporary payment relief due to Covid. How can they change this from Federal to private without my knowledge?
Phil the Buster
January 12, 2021

In reply to by slobrian

Navient is a loan servicing company that sometimes services Sallie Mae loans. Are you sure the loan was converted to a private loan? I have had loans serviced by Navient that were still federal loans.
Jpatterson
February 28, 2021
If I had it to do over I would never go to college. Appointing Navient has been a nightmare for repaying student loans. Navient has dug me hole in debt. It’s not worth it. For ten years I have talked, begged, filled out forms, emailed and made phone call after phone call. Each time I call I get different information. Yesterday I am getting deferred until September 3 and today it’s an email demanding $254.00 and tomorrow it will be different still. My credit is ruined bc of Navient and everyday my debt grows.
Rdb
March 18, 2021
I get calls from them every single day. Why are they doing this if they’re automatically deferred?!
GeeBee
March 18, 2021
So, I just got off the phone with Navient and after a very confusing conversation I was told that while my student loan is a federal student loan it is not eligible for the CoVID relief Administrative Forebearance. So, I proceed to inquire as to why and am told that my loan is held by a private "commercial" arm of Navient. As many of you know loans can be transferred without needing our authorization and apparently mine went into this category allowing Navient to continue circumventing ways to support their consumers. So beware because once again Navient's deceptive wording and practices which I guess we are all supposed to just "know about" are still in play despite federal relief administrative options.
InDebt
March 19, 2021

In reply to by GeeBee

That is so wrong. I suspect that's what they have done to me. I haven't heard from them since Feb. 2020 then suddenly in Feb 2021 they started again and reported both Feb and March late to the credit bureau. Doesn't make sense because if they were deferred for COVID from March 2020 then why have they started calling now? Why are they suddenly not eligible?? I swear we need to report this to anyone who will listen.
Kimber Lee
March 29, 2021
Why would we have to use our credit reports in order to determine who has our loans? That in itself should be a red flag...The information on mine has been wrong since 2008.
pdallen27
July 29, 2021
I applied for PSLF and my loans were transferred from Nelnet to FedLoans (PHHEA). Nelnet noted the transfer on my credit report, but FedLoans has not reported this on my credit report. Meanwhile, the DOE sent me a letter to re-certify my Income- driven repayment plan amount, shows how much I owe. I applied for a mortgage. The mortgage company have not only ignored the DOE letter, they are flipping out because the loans are not on my credit report. They only have the DOE letter letting them know that I have student loan. It’s only been a couple months, but why are the mortgage people flipping out?
Pasthope
August 10, 2021
Thought a degree would give me a better future. Instead of a better pay I just got a debt. I give up on ever paying it off. I'm just waiting on my last elderly parent to die, so I can do the same.
Beachgal
September 16, 2021

In reply to by The Paul Famil…

We are in our fifties and have four boys, two of whom are in college. We will never allow them to have student loans, at least not with our agreement. My husband and I just had our credit score lowered by 111 because Navient was not calling us on the telephone (had wrong phone number.) It's a longer story than that, but it's taught me that I certainly don't want my kids to EVER have to deal with this kind of abuse.