Federal Student Loan Debt Relief in the Context of COVID-19 — Congressional Research Service, R46314 (Updated October 15, 2024)
Summary
This Congressional Research Service report (R46314, updated October 15, 2024) by Alexandra Hegji explains the federal student loan relief granted during the pandemic. Interest accrual was suspended and ED's loans were placed in a payment pause from March 13, 2020 through August 31, 2023, with paused months counting toward the 120 payments required for Public Service Loan Forgiveness. In August 2022 ED announced cancellation of up to $10,000, or up to $20,000 for Pell Grant recipients, for borrowers under income limits, but on June 30, 2023 the Supreme Court ruled that the policy exceeded ED's authority under the HEROES Act. Outstanding federal student loan debt rose from about $1.5 trillion owed by 42.6 million individuals to about $1.6 trillion owed by about 43.4 million over the period.
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Federal Student Loan Debt Relief in the
Context of COVID-19
Updated October 15, 2024
Congressional Research Service
https://crsreports.congress.gov
R46314
SUMMARY
R46314
Federal Student Loan Debt Relief in the
October 15, 2024
Context of COVID-19 Alexandra Hegji
In early 2020, in response to the emerging COVID-19 pandemic, the Trump Administration Specialist in Social Policy
declared a public health emergency under the Public Health Service Act, a national emergency
under the National Emergencies Act, and a nationwide emergency under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act. Congress and the U.S. Department of Education
(ED)—under both the Trump and Biden Administrations—then took action to provide a variety
of student loan debt relief to qualifying borrowers of federal student loans to alleviate the potential financial effects related to
the pandemic. These actions included enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L.
116-136) and invocation of the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) by ED and
provided the following student loan relief measures:
• Accrual of interest on ED-held student loans and certain non-ED-held student loans was suspended from
March 13, 2020, through August 31, 2023.
• ED-held loans were placed in a special administrative forbearance (payment pause) for March 13, 2020,
through August 31, 2023. During this time, borrowers were not required to make payments on their loans.
This special administrative forbearance counted toward the 120 monthly payments required to qualify for
Public Service Loan Forgiveness (PSLF), the maximum repayment periods under the income-driven
repayment (IDR) plans, and the nine voluntary payments required for individuals to rehabilitate their
defaulted loans.
• Debt collection activities, including involuntary collection activities such as wage garnishment and offset
of certain federal benefits (e.g., Social Security benefits), were suspended on ED-held student loans for
March 13, 2020, through September 30, 2024.
• Multiple rules related to the 120 monthly payments required to qualify for PSLF were waived.
• A one-time revision was made to the accounts of borrowers with ED-held loans to provide credit toward
the IDR plan maximum repayment period for any months in which they were in repayment status and for
specified periods of deferment or forbearance.
Additionally, on August 24, 2022, invoking the HEROES Act, ED announced plans to cancel up to (1) $10,000 in qualifying
federal student loans per qualifying borrower whose annual income in 2020 or 2021 was less than $125,000 (for individuals)
or less than $250,000 (for certain married borrowers or heads of households), and (2) an additional $10,000, for up to
$20,000 total, for borrowers who meet the above income criteria and received a Pell Grant at any point. However, the policy
was not implemented, because on June 30, 2023, the Supreme Court ruled that the policy exceeded ED’s statutory authority
under the HEROES Act.
The primary period during which many of these debt relief measures were in effect spanned March 13, 2020, through August
31, 2023. The amount of outstanding federal student loan debt and number loan recipients affected by these flexibilities
fluctuated during this time. At the beginning of the period, about $1.5 trillion in federal student loan debt was outstanding,
borrowed by or on behalf of 42.6 million individuals. At the end of the period, about $1.6 trillion in federal student loan debt
was outstanding, borrowed by or on behalf of about 43.4 million individuals.
Congressional Research Service
Federal Student Loan Debt Relief in the Context of COVID-19
Contents
Introduction ..................................................................................................................................... 1
Administrative and Congressional Actions Taken in Response to the COVID-19
Pandemic ...................................................................................................................................... 2
Returning Direct Loans ............................................................................................................. 3
Failure to Begin Attendance................................................................................................ 3
Withdrawal .......................................................................................................................... 4
Entering Repayment and In-School Status................................................................................ 4
Interest Accrual ......................................................................................................................... 5
Payment Pause .......................................................................................................................... 8
Income-Driven Repayment Plan Account Adjustment ............................................................ 11
Income-Driven Repayment Plan Recertification .................................................................... 13
Loan Default and Collections.................................................................................................. 14
Collections of Defaulted Loans ........................................................................................ 15
Satisfactory Repayment Arrangements, Loan Rehabilitation, and Consolidation
Out of Default ................................................................................................................ 16
The Fresh Start Initiative .................................................................................................. 17
Reporting to Consumer Reporting Agencies ........................................................................... 18
Loan Cancellation, Forgiveness, and Discharge ..................................................................... 18
One-Time Student Loan Debt Relief ................................................................................ 19
Public Service Loan Forgiveness ...................................................................................... 20
Teacher Loan Forgiveness ................................................................................................ 23
Borrower Defense to Repayment ...................................................................................... 24
Total and Permanent Disability Discharge ........................................................................ 24
Additional Flexibilities .................................................................................................................. 25
Contacts
Author Information........................................................................................................................ 27
Congressional Research Service
Federal Student Loan Debt Relief in the Context of COVID-19
Introduction
In early 2020, in response to the emerging COVID-19 pandemic, the Trump Administration
declared a public health emergency under the Public Health Service Act, a national emergency
under the National Emergencies Act, and a nationwide emergency under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act.1 To alleviate the potential adverse financial effects
related to the pandemic for federal student loan borrowers, Congress and the U.S. Department of
Education (ED) took action to provide a variety of debt relief opportunities to qualifying
borrowers beyond what the Higher Education Act (HEA; P.L. 89-329) and regulations authorized
at the time for individuals facing financial difficulties (e.g., loan deferment, forbearance options).
These actions included the enactment of the Coronavirus Aid, Relief, and Economic Security
(CARES) Act (P.L. 116-136) and invocation of the Higher Education Relief Opportunities for
Students Act of 2003 (HEROES Act) by ED. Student loan debt relief included, for example, the
suspension of the accrual of interest and the requirement to make monthly payments on
qualifying federal student loans for a period of over three years.
The primary period during which many of these debt relief measures were in effect spanned
March 13, 2020, through August 31, 2023 (hereinafter, “the suspension period”). The amount of
outstanding federal student loan debt and number of loan recipients potentially affected by these
measures fluctuated during this time. At the beginning of the period, about $1.5 trillion in federal
student loan debt was outstanding, borrowed by or on behalf of 42.6 million individuals.2 As of
June 30, 2023 (the end of the quarter just prior to the end of the suspension period), about $1.6
trillion in federal student loan debt was outstanding, borrowed by or on behalf of about 43.4
million individuals.3
Several types of federal student loans were eligible for the COVID-19 student loan debt relief
measures, though availability of these measures sometimes varied depending on the type of loan
and which party (e.g., ED, a third-party lender) owned the loan. Title IV of the HEA authorizes
the operation of three federal student loan programs: the William D. Ford Federal Direct Loan
(Direct Loan) program, the Federal Family Education Loan (FFEL) program, and the Federal
Perkins Loan program.4 While new loans are authorized to be made only through the Direct Loan
1 For information on the public health emergency under the Public Health Service Act, see P.L. 78-410, as amended; 42
U.S.C. §§201-300mm–61; U.S. Department of Health and Human Services (HHS), “Public Health Emergency
Declarations, 2020: Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel
Coronavirus,” January 31, 2020, https://aspr.hhs.gov/legal/PHE/Pages/2019-nCoV.aspx. The declaration was made
retroactive to January 27, 2020, and was renewed several times. It expired May 11, 2023. For information on the
national emergency under the National Emergencies Act, see P.L. 94-412, as amended; 50 U.S.C. §§1601 et seq.; the
President of the United States of America, “Declaring a National Emergency Concerning the Novel Coronavirus
Disease (COVID-19) Outbreak,” Proclamation 9994 of March 13, 2020, 85 Federal Register 15337, March 18, 2020.
P.L. 118-3 terminated the national emergency declaration as of April 10, 2023. For information on the nationwide
emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, see P.L. 93-288, as amended;
42 U.S.C. §§5121 et seq.; Letter from Donald J. Trump, President of the United States, to Acting Secretary Wolf,
Secretary Mnuchin, Secretary Azar, and Administrator Gaynor, March 13, 2020, https://trumpwhitehouse.archives.gov/
briefings-statements/letter-president-donald-j-trump-emergency-determination-stafford-act/.
2 ED, Office of Federal Student Aid, Federal Student Aid Data Center, “Federal Student Aid Portfolio Summary,”
FY2020 Q2, https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls.
3 ED, Office of Federal Student Aid, Federal Student Aid Data Center, “Federal Student Aid Portfolio Summary,”
FY2023 Q3, https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls.
4 For additional information on loans made under these programs, see CRS Report R45931, Federal Student Loans
Made Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers; CRS Report
RL31618, Campus-Based Student Financial Aid Programs Under the Higher Education Act; and CRS Report R40122,
Federal Student Loans Made Under the Federal Family Education Loan Program and the William D. Ford Federal
Direct Loan Program: Terms and Conditions for Borrowers (archived).
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program, previously made FFEL and Perkins Loan program loans remain outstanding and
borrowers of such loans remain responsible for repaying them.5
• Direct Loan program loans are owned by ED. As of June 30, 2023, they
comprised 88% of outstanding federal student loan debt.6
• FFEL program loans may be held by private lenders, guaranty agencies (GAs),
or ED. As of June 30, 2023, they comprised 12% of outstanding federal student
loan debt.7
• Perkins Loan program loans may be held by institutions of higher education
(IHEs) that made the loans or by ED. As of June 30, 2023, they comprised less
than 1% of outstanding federal student loan debt.8
This report provides an overview of the student loan repayment debt relief measures that were
available to HEA Title IV loan borrowers potentially facing financial difficulties in light of the
pandemic. It does not discuss those preexisting loan terms and conditions (authorized through
statute and regulations) that were (and are) generally available to individuals absent the COVID-
19 national emergency.9 The report concludes with a brief description of additional existing
authorities that were available to address other aspects of student loan relief.
Administrative and Congressional Actions Taken in
Response to the COVID-19 Pandemic
In response to the COVID-19 pandemic, ED and Congress took steps to provide forms of relief to
federal student loan borrowers beyond those generally available to borrowers facing financial
difficulty and authorized in statute and regulations. These included cancelling Direct Loans for
payment periods during which qualifying individuals withdrew from their course of study due to
COVID-19, temporarily suspending interest accrual on qualifying loans, expanding the instances
under which a forbearance was available to borrowers of qualifying loans, temporarily ceasing
collections on qualifying defaulted loans, temporarily waiving or making adjustments to program
rules for certain loan repayment and forgiveness programs, and announcing a new loan
cancellation policy for most federal student loan borrowers. Some of the relief was available
through a specified end date that is applicable to all borrowers. The duration of other types of
relief is based on IHE administrative calendars.10 The federally declared national emergency
5 Direct Loan program loans have been authorized to be made since July 1, 1994. Authority to make new FFEL
program loans was terminated effective July 1, 2010. Authority to make new Perkins Loan program loans was
terminated effective October 1, 2017.
6 ED, Office of Federal Student Aid, Federal Student Aid Data Center, “Federal Student Aid Portfolio Summary,”
FY2023 Q3, https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls.
7
Ibid.
8 Ibid.
9 For information on these preexisting terms and conditions, see CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
10 Specifically, some relief is available through the end of an IHE’s payment period that includes the end of the
federally declared national emergency related to COVID-19 or through the payment period that begins after the date on
which the federally declared national emergency related to COVID-19 was rescinded. A payment period is the period
for which a Title IV student aid disbursement must be made. Payment periods differ by IHE and may also differ by
educational programs within IHEs, based on a variety of criteria including whether an educational program is measured
in clock- or credit-hours and the type of term (e.g., semester, trimester, quarter) the educational program uses. For
additional information, see 34 C.F.R. §668.4.
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ended April 10, 2023,11 and the federally declared public health emergency ended May 11,
2023.12
In some instances, the ED invoked the HEROES Act to effectuate some of the relief detailed in
this report (see text box).
The HEROES Act
The Higher Education Relief Opportunities for Students Act of 2003 (the HEROES Act), as amended, authorizes
the Secretary of Education to “waive or modify any statutory or regulatory provision applicable to the student
financial assistance programs,” under HEA, Title IV, “as the Secretary deems necessary in connection with a war
or other military operation or national emergency” to ensure that, among other things, affected individuals “are
not placed in a worse position financially” in relation to that assistance. Affected individuals include the following:
• persons on active duty or qualifying National Guard duty during a war, military operation, or national
emergency;
• persons who reside or are employed in an area that is declared a disaster area in connection with a national
emergency; and
• persons who suffered direct economic hardship as a direct result of a war or other military operation or
national emergency.
ED invoked its HEROES Act authority to take some of the administrative actions described in this report,
including numerous extensions of the suspension of interest accrual and debt collection and special administrative
forbearance (payment pause) for qualifying federal student loans.13 ED has invoked the HEROES Act in announcing
its policy to cancel up to $10,000 or $20,000, as applicable, in federal student loan debt per qualifying borrower,
though the Supreme Court ultimately ruled that the policy exceeded ED’s authority under the HEROES Act.14
Returning Direct Loans
Under the HEA, a Direct Loan borrower may be required to return or repay all or part of the
Direct Loans borrowed if the student does not complete a payment or enrollment period at an IHE
for which the loan was received. Required procedures for such returns or repayments vary
depending on whether a student did not begin attendance at an IHE or whether they withdrew.
Failure to Begin Attendance
If a student does not begin attendance at an IHE in a payment period15 or period of enrollment,16
Title IV funds (including Direct Loan funds) must be returned to ED by the IHE and/or the
student according the regulatory provisions.17 For Direct Loan amounts required to be returned by
the student, the IHE must immediately notify ED (or its loan servicers) when it becomes aware
11 See P.L. 118-3.
12 HHS, “COVID-19 Public Health Emergency,” https://www.hhs.gov/coronavirus/covid-19-public-health-emergency/
index.html (accessed August 30, 2024).
13 See, for example, ED, “Federal Student Aid Programs (Federal Perkins Loan Program, Federal Family Education
Loan Program, and William D. Ford Federal Direct Loan Program),” 87 Federal Register 61512, October 12, 2022
(hereinafter “ED, Waivers and Flexibilities Update”).
14 Biden v. Nebraska, S. Ct. 233, 2376 (2023).
15 A payment period is the period for which a Title IV student aid disbursement must be made. Payment periods differ
by IHE and may also differ by educational programs within IHEs, based on a variety of criteria including whether an
educational program is measured in clock- or credit-hours and the type of term (e.g., semester, trimester, quarter) the
educational program uses. For additional information, see 34 C.F.R. §668.4.
16 A period of enrollment, often called a loan period, is the period for which a Direct Loan is intended. A period of
enrollment “must coincide with one or more bona fide academic terms established by the school for which institutional
charges are generally assessed (e.g., a semester, trimester, or quarter).” 34 C.F.R. §685.201(b).
17 34 C.F.R. §668.21.
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that the student will not begin or has not begun attendance. Loan servicers then issue a final
demand letter to the borrower. The demand letter requires the borrower to repay any loan
principal and accrued interest within 30 days from the date the letter is mailed.18 If the borrower
fails to comply with the demand letter, they are considered in default on the loan.
ED waived the requirement that IHEs notify loan servicers if a student did not begin attendance.
By waiving this requirement, loan servicers did not issue demand letters, and borrowers were able
to repay any loans according to the terms of the promissory note, including receiving a six-month
grace period prior to the start of repayment. This waiver expired at the end of the IHE’s “payment
period that [began] after the date on which the Federally-declared national emergency related to
COVID-19 [was] rescinded.”19
Withdrawal
HEA Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the
end of the payment or enrollment period for which funds were disbursed, Title IV funds
(including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient
according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an
aid recipient is required to return any portion of a Direct Loan, they repay it in accordance with
the terms of the loan.20
The CARES Act authorized several waivers with respect to Return of Title IV Aid procedures.
Specific to Direct Loan borrowers, the act required ED to cancel a borrower’s obligation to repay
the entire portion of a Direct Loan associated with a payment period during which the student
withdrew from an IHE as a result of a qualifying emergency.21
Entering Repayment and In-School Status
In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are required to
make payments on the loans during a repayment period. The repayment period for Direct
Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans,
and Perkins Loans begins after a grace period.22 The grace period begins after the borrower ceases
to be enrolled in an eligible postsecondary program on at least a half-time basis (enrollment on at
least a half-time basis is often referred to as in-school status for federal student loan purposes).
The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent
undergraduate students), Direct Consolidation Loans, FFEL PLUS Loans, and FFEL
Consolidation Loans is required to begin when the loan is fully disbursed. However, borrowers of
these loans, along with borrowers of Direct Subsidized Loans, Direct Unsubsidized Loans, FFEL
Stafford Loans, FFEL Unsubsidized Loans, and Perkins Loans, may qualify for a deferment on
18 34 C.F.R. §685.211(e)(2).
19
ED, “Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, William
D. Ford Federal Direct Loan Program, and Federal-Work Study Programs),” 85 Federal Register 79860, December 11,
2020 (hereinafter ED, Waivers and Flexibilities).
20 34 C.F.R. §668.22(h)(3)(i).
21 The CARES Act defines a qualifying emergency as (1) “a public health emergency related to the coronavirus
declared by the Secretary of Health and Human Services pursuant to section 319 of the Public Health Service Act”; (2)
“an event related to the coronavirus for which the President declared a major disaster or an emergency under section
401 or 501, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act”; or (3) “a national
emergency related to the coronavirus declared by the President under section 201 of the National Emergencies Act.”
22 34 C.F.R. §§674.31, 682.209, 685.207. For Direct Loan program and FFEL program loans, the grace period typically
lasts six months. For Perkins Loan program loans, the grace period typically lasts nine months.
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the basis of their in-school status (or the in-school status of the student on whose behalf a PLUS
Loan was made to a parent borrower), during which time they are not required to make payments
on their loans but during which interest may accrue.23 A borrower qualifies for such an in-school
deferment if they, or the student on whose behalf a PLUS Loan is made, is enrolled on at least a
half-time basis.
ED announced some flexibilities for borrowers of Direct Loan and FFEL program loans whose
loan status was in school on the date the student’s “attendance at the institution was interrupted
due to COVID-19 national emergency.”24 IHEs were to continue reporting the loan status of such
borrowers as in school until the IHE determined that the student had withdrawn from it.25 ED
permitted IHEs to defer reporting a student’s withdrawn status if the IHE had reasonable
expectation that it would reopen at the start of a payment period that began no later than 90 days
following its COVID-19-related closure and that the student would resume attendance when the
IHE reopened.26 This flexibility was available through the end of an IHE’s payment period that
included December 31, 2020, or the end of the IHE’s payment period “that include[d] the end
date for the Federally-declared emergency related to COVID-19,” whichever was later.27
ED guidance did not address Perkins Loans with respect to entering repayment.
Interest Accrual
Interest is charged on loans made under the Direct Loan, FFEL, and Perkins Loan programs.
Typically, under a limited set of circumstances the federal government subsidizes some or all of
the interest that would otherwise accrue on certain Direct Subsidized Loans, FFEL Stafford
Loans, and Perkins Loans.28
For March 13, 2020, through August 31, 2023,29 the accrual of interest on certain federal student
loans was suspended.30 The loans on which interest accrual was suspended were (1) ED-held
23 34 C.F.R. §§674.33, 682.210, 685.204(b).
24 ED, Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study
related to Coronavirus (COVID-19),” April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. ED guidance does not
specify which circumstances (e.g., an IHE’s temporary closure or a student’s withdrawal) constitutes an interruption
due to COVID-19.
25 ED, Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study
related to Coronavirus (COVID-19),” April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19.
26 ED, Office of Postsecondary Education, Electronic Announcement, “Guidance for interruptions of study related to
Coronavirus (COVID-19),” March 5, 2020 (updated June 16, 2020), https://fsapartners.ed.gov/knowledge-center/
library/electronic-announcements/2020-03-05/guidance-interruptions-study-related-coronavirus-covid-19-updated-
june-16-2020.
27 ED, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to
Coronavirus (COVID-19),” August 21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19.
28 Periods of interest subsidy include, but are not limited to, in-school periods while a borrower is enrolled in an eligible
program on at least a half-time basis, during a grace period following enrollment on at least a half-time basis, and
during periods of authorized deferment.
29 ED, Waivers and Flexibilities Update, p. 61514 and the Fiscal Responsibility Act of 2023 (P.L. 118-3), §271.
30 The cessation of interest accrual (“0% interest policy”) for ED-held loans was originally put into place via
administrative action by ED on March 20, 2020. (ED, “Delivering on President Trump’s Promise, Secretary DeVos
Suspends Federal Student Loan Payments, Waives Interest During National Emergency,” press release, March 20,
2020.) Since then, it has been extended numerous times via legislative and administrative action. For a timeline of the
(continued...)
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student loans (e.g., all Direct Loan program loans, and FFEL and Perkins Loan program loans
held by ED); (2) specified31 defaulted FFEL program loans held by GAs, some of which had been
transferred to ED (see text box below)32; and (3) other specified previously defaulted FFEL
program loans.33 The suspension of interest meant borrowers of these loan types were not
required to pay interest on such loans for this period. (In practice, the cessation of interest accrual
meant that the interest rates for qualifying student loans had been effectively set to 0% during this
time period.) This permitted borrowers to enter into a period of deferment or forbearance without
concern for whether interest would accrue and capitalize. Borrowers who continued making
payments on their loans during this time of interest suspension did not have decreased monthly
payments. They had the full amount of the payments applied toward interest and fees (for
defaulted loans only) that accrued prior to March 13, 2020, and then to loan principal.34
Borrowers who were eligible for this benefit were not required to apply for it; ED and GAs (in the
case of those defaulted FFEL program loans specified above) automatically adjusted their
accounts to reflect the interest suspension.
In addition, ED authorized FFEL program lenders and institutions that held Perkins Loans to
provide “the same zero interest” benefit to non-ED-held loans on a voluntary basis.35 Borrowers
history of these actions, see CRS In Focus IF12136, Student Loans: A Timeline of Actions Taken in Light of the
COVID-19 Pandemic. ED invoked the HEROES Act initially to effectuate and subsequently to extend this policy. ED,
Waivers and Flexibilities, p. 79857 and ED, Waivers and Flexibilities Update, pp. 61513-61514. The Fiscal
Responsibility Act of 2023 terminated the interest accrual suspension, effective “sixty days after June 30, 2023” and
prohibited ED from using “any authority to implement an extension of [the interest accrual and payment suspension].”
Though 60 days after June 30, 2023, was August 29, 2023, interest did not begin accruing on loans until September 1,
2023.
31 Defaulted FFEL program loans held by GAs that were eligible for this relief were those loans on which a default
claim was paid prior to March 13, 2020, that were not subject to an active bankruptcy filing, and that were still in
default as of May 12, 2021. Also included were those loans on which a default claim was paid on or after March 13,
2020, and those paid on or prior to the end of the student loan payment pause that were not subject to an active
bankruptcy filing and that were still in default as of May 12, 2021. In general, a GA pays a default claim (i.e.,
reimburses the FFEL program loan holder for most or all of the losses associated with a default) if a borrower defaults
on their FFEL program loan. 34 C.F.R. §682.404(a).
32 The cessation of interest accrual (“0% interest policy”) for defaulted GA-held FFEL program loans was put into
place via administrative action on March 30, 2021. In doing so, ED announced that the policy would apply
retroactively to March 13, 2020, but only for the period that a GA held the loan. ED, “Department of Education
Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press
release, March 30, 2021, https://www.ed.gov/news/press-releases/department-education-announces-expansion-covid-
19-emergency-flexibilities-additional-federal-student-loans-default; and ED, Office of Postsecondary Education, Dear
Colleague Letter GEN-21-03, “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by
Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-
colleague-letters/2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-
updated-may-24-2021.
33 These loans are those that were in default “during the pandemic” (regardless of when a default claim was paid) and
for which the default was resolved through rehabilitation or consolidation prior to May 12, 2021. Upon rehabilitation or
consolidation, the loans may have been purchased by third-party lenders or transferred to ED. For any such loans
purchased by a third-party lender, it appears that the loans would be ineligible for the 0% interest policy after the
purchase, as they would be FFEL program loans not held by ED. For any such loans transferred to ED, it appears that
they would be eligible for the 0% interest policy after the transfer, as they would be FFEL program loans held by ED.
34 ED, Office of Federal Study Aid, COVID-19 Loan Payment Pause and 0% Interest, https://studentaid.gov/
announcements-events/covid-19/payment-pause-zero-interest, accessed April 11, 2023 (site modified).
35 ED, Waivers and Flexibilities, p. 79862, and ED, Office of Postsecondary Education, Electronic Announcement,
“UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020,
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-
interruptions-study-related-coronavirus-covid-19. At least some IHEs have suspended payments on their Perkins Loans
in response to COVID-19. See, for example, Danielle Douglas-Gabriel, “University of California offers Perkins Loan
borrowers relief. Will other colleges follow?” The Washington Post, April 20, 2020.
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who were ineligible for the interest suspension benefit because their FFEL program lender or
Perkins Loan program IHE did not provide it could qualify for the interest suspension by
consolidating such loans into a Direct Consolidation Loan, which was eligible for the interest
suspension benefit.36
This interest suspension, coupled with the student loan payment pause (discussed later in this
report) and other HEA and regulatory options for temporary cessation of payments (e.g.,
deferment) meant that qualifying borrowers could temporarily cease making payments on their
loans without interest accruing or being subject to capitalization37 when they began making
payments at a later time.
Assignment of Certain Defaulted FFEL Program Loans to ED
When an FFEL borrower defaults, the loan holder files a default claim (or insurance claim) with a GA. Upon
payment of the claim, which serves as payment for the holder’s losses stemming from borrower default, the holder
assigns the defaulted loan to the GA, which in turn files a claim with ED for a reinsurance payment. GAs are
responsible for handling initial collections work on defaulted loans and for administering other aspects of the FFEL
program. In certain instances, ED may require GAs to assign defaulted loans to it. Upon assignment, ED becomes
the holder of the defaulted FFEL program loan and becomes responsible for servicing and collecting on it (via
contracted loan servicers).
In addition to extending several of the COVID-19 pandemic student loan relief provisions (suspension of interest
accrual and debt collections) to defaulted GA-held FFEL program loans, ED also required GAs to assign a subset of
such loans to it. Specifically, GAs were required to assign to ED defaulted FFEL program loans on which the GA
paid a default claim to a FFEL program lender on or after March 13, 2020, and on or prior to the end date of the
student loan payment pause for ED-held loans and that were not subject to an active bankruptcy filing. Thus, ED
became the owner of these loans and became responsible for servicing and collecting on such loans. In addition,
these loans were returned to good standing (i.e., active repayment status).
Sources: 20 U.S.C. §1078(c)(8); 34 C.F.R. §682.409; and U.S. Department of Education, Office of Postsecondary
Education, Dear Colleague Letter GEN-21-03, “Expansion of Collections Pause to Defaulted FFEL Program Loans
Managed by Guaranty Agencies (Updated May 24, 2021),” May 12, 2021, https://fsapartners.ed.gov/knowledge-
center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-
guaranty-agencies-updated-may-24-2021. For additional information on FFEL program administration and GAs, see
CRS Report R46409, Proposals to Extend CARES Act Provisions to Federal Student Loans Not Held by the Department of
Education: Frequently Asked Questions.
36 ED, Office of Federal Study Aid, COVID-19 Loan Payment Pause and 0% Interest, https://studentaid.gov/
announcements-events/covid-19/payment-pause-zero-interest,accessed April 11, 2023 (site modified).
37 ED has indicated that, unless a borrower consolidates their loan, any balance of unpaid interest on a borrower’s loan
before March 13, 2020, will not be capitalized during the COVID-19 payment suspension (discussed later in this
report) and through six months after the payment pause ends. This policy differs from ED’s previous policy under
which a balance of unpaid interest on a borrower’s loan before March 13, 2020, was capitalized in a larger set of
instances. ED indicates that it has asked loan servicers to undo any interest capitalization that has an effective date after
March 13, 2020. For additional information, see ED, Office of Federal Study Aid, COVID-19 Loan Payment Pause and
0% Interest, https://studentaid.gov/announcements-events/covid-19/payment-pause-zero-interest,accessed April 11,
2023 (site modified).
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Payment Pause
The HEA and regulations provide for a variety of loan deferment38 and loan forbearance39
options, during which borrowers may temporarily cease making payments on their loans. In
general, these options are available to borrowers based on relatively narrow circumstances, such
as an unemployment deferment, which is available to individuals who are either receiving
unemployment benefits or are registered with an employment agency and diligently seeking to
obtain full-time employment.40 In most instances, a borrower must proactively apply for and
request a deferment or forbearance.
In response to the COVID-19 pandemic, ED and Congress took further steps to enable borrowers
to temporarily cease making payments on their qualifying loans. From March 13, 2020, through
August 31, 2023, monthly payments were suspended for ED-held student loans (e.g., all Direct
Loan program loans, and FFEL and Perkins Loan program loans held by ED) and defaulted GA-
held FFEL program loans that were transferred to ED under specified conditions (see text box).41
(In practice, ED placed all such loans in administrative forbearance.42) During this time,
borrowers were not required to make payments due on their loans.43 Borrowers who were eligible
for this benefit were not required to apply for it; ED automatically suspended payments. This
special administrative forbearance was frequently called the payment pause.
38 A loan deferment is a temporary period during which a borrower’s obligation to make regular monthly payments of
principal and interest is suspended, and during which an interest subsidy (i.e., interest does not accrue) may be provided
on certain loan types.
39 A loan forbearance constitutes permission for a borrower to temporarily cease making payments, make payments in
reduced amounts, or make payments over an extended period. No interest subsidies are provided during forbearance
(i.e., interest continues to accrue).
40 See 34 C.F.R. §§674.34(d), 682.210(h), and 685.204(f).
41
On March 30, 2021, ED announced that FFEL program loans that defaulted on or after March 13, 2020, would be
returned to good standing. Because such loans were returned to good standing and are now held by ED, the COVID-19
monthly payment suspension that applied to ED-held loans now applied to these loans; thus, such borrowers were not
required to make monthly payments on their loans. ED, “Department of Education Announces Expansion of COVID-
19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press release, March 30, 2021,
https://www.ed.gov/news/press-releases/department-education-announces-expansion-covid-19-emergency-flexibilities-
additional-federal-student-loans-default.
42 An administrative forbearance is a type of forbearance that ED grants without required documentation from a
borrower. Among other qualifying circumstances, ED may grant an administrative forbearance due to a local or
national emergency. 34 C.F.R. §§674.33(d)(5)(iii), 682.211(i)(2)(i), 685.205(b)(8).
43 On March 20, 2020, ED invoked the HEROES Act and directed all federal student loan servicers to grant a 60-day
administrative forbearance (beginning March 13, 2020) to any borrower of an ED-held student loan who requested one.
In addition, ED authorized loan servicers to automatically place into a 60-day administrative forbearance any borrower
of an ED-held loan who is more than 31 days delinquent on their loans as of March 13, 2020, or who becomes 31 days
delinquent thereafter. (ED, “Delivering on President Trump’s Promise, Secretary DeVos Suspends Federal Student
Loan Payments, Waives Interest During National Emergency,” press release, March 20, 2020; and ED, Waivers and
Flexibilities, p. 79857). Subsequently, the CARES Act was enacted, which required that ED automatically suspend all
payments on Direct Loans and ED-held FFEL program loans through September 30, 2020. While the CARES Act did
not provide for a suspension of payments on ED-held Perkins Loan program loans, ED applied a similar suspension to
such loans. (ED, Waivers and Flexibilities, p. 79857) Subsequently, invoking the HEROES Act, ED extended the
payment pause on numerous occasions. (ED, Waivers and Flexibilities, p. 79857 and ED, Waivers and Flexibilities
Update, pp. 61513-61514.) The Fiscal Responsibility Act of 2023 terminated the suspension of payments, effective
“sixty days after June 30, 2023” and prohibited ED from using “any authority to implement an extension of [the interest
accrual and payment suspension].” Though 60 days after June 30, 2023, was August 29, 2023, the suspension of
payments did not end until September 1, 2023. Loan servicers then began sending bills to borrowers at least 21 days
before the bills’ due dates. Most borrowers first payments following the end of the payment suspension were to be due
in October 2023. For a timeline of the history of these actions, see CRS In Focus IF12136, Student Loans: A Timeline
of Actions Taken in Light of the COVID-19 Pandemic.
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In implementing these provisions, ED permitted borrowers to opt out of the payment pause by
contacting their loan servicer. In addition, until August 28, 2023, borrowers could contact their
loan servicers to request a refund of any payments made on their account during the suspension
period.44
ED also authorized FFEL program lenders and institutions that held Perkins Loans to provide
“the same ... cessation of payments” benefit to borrowers on a voluntary basis.45 Borrowers who
were ineligible for this benefit because their FFEL program lender or Perkins Loan program IHE
did not provide it could take advantage of the benefit by consolidating such loans into a Direct
Consolidation Loan. ED waived the three-year (36 month) cumulative forbearance limit for
Perkins Loan borrowers, regardless of whether the loans were held by ED or an IHE.46
Throughout most of the suspension period, periods of deferment and forbearance did not count
toward the 120 monthly payments required to qualify for Public Service Loan Forgiveness
(PSLF)47 and were not included in a borrower’s repayment period (e.g., periods of unemployment
deferment do not count toward the maximum repayment periods to qualify for loan forgiveness
under the income-driven repayment48 [IDR] plans).49 However, for Direct Loan borrowers (the
only borrowers eligible for PSLF), suspended payments that would have been made during the
44 ED, Office of Federal Study Aid, “COVID-19 Loan Payment Pause and 0% Interest,” https://studentaid.gov/
announcements-events/covid-19/payment-pause-zero-interest,accessed April 13, 2023 (site modified); and ED, Office
of Federal Student Aid, “Can I still request a refund for payments I made during the COVID-19 forbearance payment
pause period?”, https://studentaid.gov/help-center/answers/article/still-request-refund-for-payments-made-during-
forbearance-payment-pause (accessed August 28, 2024). It appears that borrowers of non-ED-held FFEL program
loans who made voluntary payments during the payment pause period, subsequently defaulted on their loans during the
payment pause period, and had their loans returned to good standing by ED would qualify for a refund of their
voluntary payments, even though at the time the payment(s) was made, their loans did not qualify for the COVID-19
payment suspension.
45 ED, Waivers and Flexibilities, p. 79862, and ED, Office of Postsecondary Education, Electronic Announcement,
“UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020,
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-
interruptions-study-related-coronavirus-covid-19. Some commercial FFEL program loan holders have voluntarily
provided borrowers with additional forbearance options in response to the COVID-19 pandemic. See, for example,
Marie Albiges, “Virginia offers temporary relief on some private loans during coronavirus,” The Virginian-Pilot, April
30, 2020. Some IHEs suspended payments on their Perkins Loans in response to COVID-19. See, for example,
Danielle Douglas-Gabriel, “University of California offers Perkins Loan borrowers relief. Will other colleges follow?”,
The Washington Post, April 20, 2020.
46 ED, Office of Postsecondary Education, Electronic Announcement CB-22-03, “Waiver of the Three-year Cumulative
Limit on Forbearances for Federal Perkins Loan borrowers,” January 22, 2022, https://fsapartners.ed.gov/knowledge-
center/library/electronic-announcements/2022-01-13/waiver-three-year-cumulative-limit-forbearances-federal-perkins-
loan-borrowers.
47 Similarly, periods of deferment and forbearance did not count toward the 120 monthly payments required to qualify
for Temporary Expanded PSLF (TEPSLF).
48 Under the five IDR plans, borrowers make monthly loan payments in amounts that are capped at a specified share
(e.g., 10%, 15%) of their discretionary income over a repayment period that may not exceed a specified duration (e.g.,
20 or 25 years). If after making payments according to one or more of the IDR plans for the duration of the maximum
repayment period a borrower has not fully repaid their student loan debt, their remaining student loan balance is
forgiven. For additional information on the IDR plans, see CRS Report R45931, Federal Student Loans Made Through
the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
49 These limitations were amended on July 1, 2023, and July 1, 2024, respectively. Thus, some periods of deferment
and forbearance may now count toward PSLF payment requirements and IDR forgiveness requirements. ED,
“Institutional Eligibility Under the Higher Education Act of 1965, as Amended; Student Assistance General Provisions;
Federal Perkins Loan Program; Federal Family Education Loan Program; and William D. Ford Federal Direct Loan
Program,” 87 Federal Register 66065, November 1, 2022 (hereinafter, “ED, Final Rule, November 1, 2022”) and ED,
“Improving Income Driven Repayment for the William D. Ford Federal Direct Loan Program and the Federal Family
Education Loan (FFEL) Program,” 88 Federal Register 43820, July 10, 2023.
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payment pause counted toward the 120 monthly payments required to qualify for PSLF if the
borrower worked full-time in qualifying employment during that time.50
For borrowers whose loans qualified for the payment pause, the suspended payments counted
toward the repayment periods under the IDR plans. Suspended payments also counted toward the
nine voluntary payments within 10 consecutive months required for individuals to rehabilitate51
their defaulted loans, but only if those suspended payments occurred after a borrower entered into
a rehabilitation agreement with ED.52 ED stated that for defaulted GA-held FFEL program loan
borrowers who entered into a rehabilitation agreement, “months following entry into the
agreement in which payments are not required, made, or made and then refunded per a borrower
request will be automatically counted as a payment toward the required nine payments within 10
months.”53 It is unclear whether paused payments on non-ED-held FFEL program loans whose
lender has authorized a special administrative forbearance counted toward the IDR plan
repayment periods. Perkins Loans, regardless of whether they are held by ED or an IHE, are
ineligible for IDR plans; thus, this measure did not apply to Perkins Loans.
ED authorized (but did not require) institutions that held Perkins Loans to grant a forbearance to
borrowers who were in repayment and unable to make payments due to COVID-19. Under this
forbearance, interest continued to accrue. The initial forbearance period could not exceed three
months, but it could be extended upon a borrower providing supporting documentation.
Borrowers were required to request the forbearance from the IHE. This period of forbearance was
excluded from the three-year cumulative forbearance limit for Perkins Loan borrowers.54 These
50 Similarly, paused payments that would have been made during the special administrative forbearance counted toward
the 120 monthly payments required to qualify for TEPSLF. ED, Waivers and Flexibilities, p. 79863; ED, Waivers and
Flexibilities Update, p. 61513; ED, Office of Postsecondary Education, Electronic Announcement, “UPDATED
Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://fsapartners.ed.gov/
knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-
coronavirus-covid-19; and ED, Office of Federal Study Aid, “COVID-19 Emergency Relief and Federal Student Aid,”
https://studentaid.gov/announcements-events/covid-19#public-service-loan-forgiveness-pslf (accessed August 30,
2023).
51 Loan rehabilitation is the process by which a borrower may bring a loan out of default by adhering to specified
repayment requirements. 34 C.F.R. §§674.39, 682.405, 685.211(f).
52 If a borrower was not in a rehabilitation agreement prior to the start of the paused payments, they could enter into
one and any suspended payments following entry into the rehabilitation agreement counted toward rehabilitation. ED,
Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-events/
covid-19/default, accessed April 14, 2023 (site modified).
53 ED, Office of Postsecondary Education, Dear Colleague Letter GEN-21-03, “Expansion of Collections Pause to
Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021),” May 12, 2021,
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-
defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. See the “Collection on Defaulted
Loans” section for additional information on refunds of payments made on defaulted GA-held FFEL Program loans.
54 ED, Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study
related to Coronavirus (COVID-19),” April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19; and ED, Office of
Postsecondary Education, Electronic Announcement CB-22-03, “Waiver of the Three-year Cumulative Limit on
Forbearances for Federal Perkins Loan Borrowers,” January 13, 2022, https://fsapartners.ed.gov/knowledge-center/
library/electronic-announcements/2022-01-13/waiver-three-year-cumulative-limit-forbearances-federal-perkins-loan-
borrowers.
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flexibilities were available through the end of the IHE’s payment period55 “that include[d] the end
date for the Federally-declared emergency related to COVID-19.”56
Income-Driven Repayment Plan Account Adjustment
Under the various IDR plans, borrowers may have any remaining outstanding balance of their
FFEL program57 and Direct Loan program loans forgiven after making the equivalent of 240 or
300 monthly payments (20 or 25 years’ worth of payments, depending on the plan) according to
one of more of the IDR plans or certain other qualifying plans.58 Typically, periods of deferment
or forbearance do not count toward the 20- or 25-year repayment periods under the IDR plans;
although, periods of economic hardship deferment and the above-described COVID-19 related
payment pause do count toward the 20- or 25-year repayment period.59 Prior to July 1, 2024,
payments made on any loans prior to their consolidation into a Consolidation Loan did not count
toward the 20- or 25-year repayment period.60
On April 19, 2022, ED announced a one-time adjustment to borrower loan accounts to revise the
number of IDR-qualifying payments.61 Through the account adjustment, borrowers received IDR
payment credit for the following62:
55 A payment period is the period for which a Title IV student aid disbursement must be made. Payment periods differ
by IHE and may also differ by educational programs within IHEs, based on a variety of criteria including whether an
educational program is measured in clock- or credit-hours and the type of term (e.g., semester, trimester, quarter) the
educational program uses. For additional information, see 34 C.F.R. Section 668.4.
56 ED, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to
Coronavirus (COVID-19),” August 21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. See also,
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-
interruptions-study-related-coronavirus-covid-19, and ED, Office of Postsecondary Education, Electronic
Announcement CB-22-03, “Waiver of the Three-year Cumulative Limit on Forbearances for Federal Perkins Loan
Borrowers,” January 13, 2022, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2022-01-
13/waiver-three-year-cumulative-limit-forbearances-federal-perkins-loan-borrowers.
57 Only the Income-Based Repayment plans are available to FFEL program borrowers.
58 The Saving on a Valuable Education (SAVE) repayment plan would provide loan forgiveness benefits to qualifying
borrowers as early as borrowers having made the equivalent of 120 monthly payments (10 years). (34 C.F.R.
§685.209(k)(3)). The shortened timeline was slated to be effective July 1, 2024; however, ED is enjoined from
implementing SAVE repayment plan provisions while litigation challenging the suit continues. Missouri v. Biden, No.
24-2332, 2024 WL 3738157, *4 (8th Cir. Aug. 9, 2024) (per curium). Should the SAVE repayment plan be
implemented at a later date, it seems that months of the payment pause would count toward the SAVE repayment plan
repayment period.
59 See, for example, 34 C.F.R. §§685.209(b)(3)(iii)(B)(9) and 685.221(f)(1)(vii).
60 The same final rule that authorized the SAVE repayment plan also made a number of changes to existing IDR plans,
including counting certain payments on loans prior to consolidation toward the IDR plan’s repayment period. This
provision’s slated effective date was July 1, 2024. (ED, “Improving Income Driven Repayment for the William D. Ford
Federal Direct Loan Program and the Federal Family Education Loan (FFEL) Program,” 88 Federal Register 43820,
43903 July 10, 2023.) Based on the terms of the injunction (see footnote 60), it is unclear whether the injunction
prohibiting ED from implementing the SAVE repayment plan extends to this provision as well.
61 ED stated that account adjustment was to “address historical failures in the administration of the federal student loan
program and support student loan borrowers through the pandemic.” ED, “Department of Education Announces
Actions to Fix Longstanding Failures in the Student Loan Programs,” press release, April 19, 2022,
https://www.ed.gov/news/press-releases/department-education-announces-actions-fix-longstanding-failures-student-
loan-programs.
62 ED, Office of Federal Student Aid, “Income-Driven Repayment Account Adjustment,” https://studentaid.gov/
announcements-events/idr-account-adjustment (hereinafter, “ED, IDR Account Adjustment”) (accessed August 22,
2024).
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• any months in which a borrower’s loan was in repayment status, “regardless of
the payments made,63 loan type,64 or repayment plan”;
• 12 months or more of consecutive forbearance;
• 36 or more months of cumulative forbearance, with any combination of
forbearance periods counting toward the cumulative amount65;
• months spent in economic hardship deferment on or after January 1, 2013;
• months spent in “military deferments” after January 1, 2013;
• months spent in any type of deferment, excluding in-school deferment, prior to
2013; and
• months in repayment on loans prior to their consolidation into a Consolidation
Loan.
ED automatically implemented the account adjustments (i.e., borrowers were not required to
apply) for Direct Loan program loans and ED-held FFEL program loans. Borrowers66 with non-
ED-held FFEL program loans could apply to consolidate their loans into the Direct Loan by June
30, 2024, to take advantage of the account adjustment.67
In addition, ED was to automatically forgive the loans of borrowers who accumulated at least 20
or 25 years in repayment, even if they were not enrolled in an IDR plan. To receive forgiveness, a
borrower was required to meet one of the following requirements, all of which included the terms
of the above-described account adjustment:68
• Borrowers who were enrolled in the Pay As You Earn (PAYE) repayment plan—a
type of IDR plan—must have been in repayment for 20 years (240 months).
63 ED indicated this included periods during which a loan was in repayment status, as indicated in the National Student
Loan Data System, and included periods when a payment was due and not made, up through 270 days of delinquency,
or the point in time when a default claim is paid on an FFEL program loan by a guaranty agency. Repayment status
excluded grace periods and periods of deferment, forbearance, or default. CRS email communication with ED,
September 22, 2022.
64 ED indicated that borrowers who consolidated into the Direct Loan program would have all time in repayment on
their underlying Direct Loan program, FFEL program, and Perkins Loan program loans counted as time in repayment
on their new Direct Consolidation Loan for purposes of the IDR account adjustment. ED stated time in repayment on
Health Education Assistance Loan (HEAL) program loans and other student loans made under the Public Health
Service Act prior to consolidation would not be counted as time in repayment on the new Direct Consolidation Loan
for purposes of the IDR account adjustment. CRS email communication with ED, September 22, 2022, and October 5,
2022.
65 Borrowers were to receive credit for months in deferment or forbearance that occurred after July 1, 1994; however,
months in deferment or forbearance that occurred prior to July 1, 1994, were to be used to determine whether a
borrower met the 12-month or 36-month forbearance threshold. ED, IDR Account Adjustment (accessed August 22,
2024).
66 ED indicated that borrowers who exited default prior to the end of the Fresh Start period (see the “The Fresh Start
Initiative” section) were to receive the “the full benefit of the account adjustment and receive credit for periods in
default from March 2020 through the month they exit default.” After the Fresh Start period, only borrowers who
rehabilitated their loan out of default would benefit from the IDR account adjustment, but they would not receive credit
for periods in default during the payment pause. ED, IDR Account Adjustment, (accessed August 22, 2024).
67 ED, IDR Account Adjustment (accessed August 30, 2024); and ED, “Department of Education Announces Actions to
Fix Longstanding Failures in the Student Loan Programs,” press release, April 19, 2022, https://www.ed.gov/news/
press-releases/department-education-announces-actions-fix-longstanding-failures-student-loan-programs.
68 CRS email communication with ED, September 22, 2022.
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• Borrowers with only undergraduate student loan debt and who were not enrolled
in the PAYE repayment plan must have been in repayment for 20 years (240
months).
• Borrowers with both undergraduate and graduate student loan debt, or graduate
student loan debt only, and who were not enrolled in the PAYE repayment plan
must have been in repayment for 25 years (300 months).
• Parent PLUS Loans and Consolidation Loans used to repay Parent PLUS Loans
must have been in repayment for 25 years (300 months).69
Borrowers whose monthly payments exceeded 20 or 25 years following the account adjustment,
were to receive a refund for those monthly payments in excess of 20 or 25 years.70
For borrowers with Direct Consolidation Loans or ED-held FFEL Consolidation Loans,
(regardless of whether the loan repaid Direct Loan program, FFEL program, Perkins Loan
program, or other older HEA program loans), and assuming the repayment histories of the loans
underlying the qualifying Consolidation Loan overlapped, ED was to credit the entire
Consolidation Loan with the largest number of months in repayment of the loans that were
consolidated.71 For example, if a borrower had 50 months in repayment on one federal student
loan and 100 months in repayment on a second federal student loan and consolidated those two
loans into a Direct Consolidation Loan, the borrower would receive credit for 100 months of IDR
payment credit on the new Direct Consolidation Loan.72
For borrowers with qualifying Consolidation Loans for which the underlying loans did not have
overlapping repayment histories, the Consolidation Loan could be credited with more months in
repayment than the underlying loan with the longest repayment history. The precise
circumstances under which a borrower could be credited with more months in repayment than
their underlying loan with the longest repayment history are unclear. ED’s website gave the
following example of how this might occur for a borrower with a loan with 50 months of
repayment and another loan with 100 months of repayment:
if the loan with 50 months of time in repayment included January 2017 in repayment status
but the loan with 100 months did not, the resulting consolidation loan might be credited
with 101 months of payments. This can occur where borrowers relied on different
repayment, forbearance, or deferment options on different loans for the same period.73
Income-Driven Repayment Plan Recertification
Borrowers enrolled in an IDR plan must annually provide documentation of their income and
family size to remain eligible for IDR repayment (referred to as recertification).74 Typically, an
69 CRS email communication with ED, October 5, 2022.
70 ED, IDR Account Adjustment (accessed April 14, 2023).
71
According to ED, borrowers of HEAL program loans (previously made under the Public Health Service Act) could
receive credit toward IDR forgiveness, but only if they first consolidated those loans with Direct Loan program, FFEL
program, or Perkins Loan program loans. Such borrowers were to only receive credits on the HEAL program loan for
repayment periods associated with payment periods of their HEA loans. For example, if a borrower had 100 months of
payment on their HEAL program loan and 60 months of payment on a Direct Loan program Unsubsidized Loan and
then consolidated those two loans into a Direct Consolidation Loan, they would receive credit for 60 months of IDR
payment credit on their Direct Consolidation Loan. ED, IDR Account Adjustment (accessed August 22, 2024).
72 ED, IDR Account Adjustment (accessed April 14, 2023).
73 ED, IDR Account Adjustment (accessed August 22, 2024).
74 If a borrower fails to recertify their income under an IDR plan, the consequences vary depending on the plan. In
(continued...)
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individual certifies their income by providing documentation of their taxable income, which may
include providing ED with a paystub or federal income tax return information data from the
Internal Revenue Service; borrowers self-certify their family size. ED waived the requirement
that a borrower annually recertify their income and family size and stated that the earliest a
borrower could be required to do so is September 2024, and the deadline for recertifying the
information is November 1, 2024.75 Borrowers could voluntarily recertify their income during the
payment pause. Finally, ED permitted borrowers to self-report their income, without providing
tax documentation, when applying for or recertifying their IDR plan until six months after the end
of the payment pause period.76
Loan Default and Collections
Defaulting on a federal student loan can result in a number of adverse consequences for a
borrower. Upon default, the borrower’s obligation to repay the loan is accelerated (i.e., the entire
unpaid balance of principal and interest becomes due in full).77 In addition, the borrower loses
eligibility for certain borrower benefits (e.g., deferment, loan forgiveness), as well as eligibility to
receive additional Title IV federal student aid. A defaulted borrower’s student loan account may
be transferred to ED’s Default Resolution Group (DRG)78 in the case of ED-held loans, or a GA
in the case of non-ED-held FFEL program loans, that will contact the borrower and offer them
options for voluntary debt resolution, such as loan rehabilitation, consolidation out of default, or
entry into a voluntary repayment agreement. If such voluntary debt resolution attempts do not
succeed, involuntary collections practices may be utilized, which include administrative wage
garnishment; offset of federal income tax returns, Social Security benefits, and certain other
federal benefits; and civil litigation.79
general, a borrower’s monthly repayment will be recalculated in a manner that is not based on their income. Under
some of the IDR plans, a borrower’s failure to recertify income annually will also result in any unpaid interest being
capitalized. Under all of the IDR plans, if a borrower fails to recertify their family size, they will remain in their chosen
IDR plan, but a family size of one will be assumed for them. If a borrower’s actual family size is larger than one, but a
loan servicer assumed a family size of one due to the borrower’s failure to recertify, their monthly payments may
increase under some IDR plans or they may lose eligibility to make payments based on income. ED, Office of Federal
Student Aid, “What will happen if I don’t recertify my income and family size by the annual deadline?”,
https://studentaid.gov/manage-loans/repayment/plans/income-driven#fail-to-recertify (accessed August 28, 2024).
75 ED, Office of Federal Student Aid, “COVID-19 Relief: Income-Driven Repayment (IDR) Plans,”
https://studentaid.gov/announcements-events/covid-19/income-driven-repayment#when-to-recertify (accessed August
22, 2024).
76
ED, Office of Federal Student Aid, “COVID-19 Relief: Income-Driven Repayment (IDR) Plans,”
https://studentaid.gov/announcements-events/covid-19/income-driven-repayment#when-to-recertify, accessed April 14,
2023 (site modified).
77 34 C.F.R. §§674.31(b)(8), 682.411(f), 685.211(d)(1).
78 Previously, ED contracted with several private collection agencies (PCAs) to perform loan collections activities
when a borrower defaulted on their ED-held loan. On November 8, 2021, ED announced it had cancelled its contracts
with the PCAs and recalled all borrower accounts. ED’s Default Resolution Group is now responsible for assisting
borrowers of defaulted ED-held loans. ED, Office of Federal Student Aid, “COVID-19 Emergency Relief and Federal
Student Aid,” https://studentaid.gov/announcements-events/covid-19#defaulted-loans (accessed August 28, 2024).
79 For additional information, see 34 C.F.R. Parts 30, 31, 34; and CRS Report R45931, Federal Student Loans Made
Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
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Federal Student Loan Debt Relief in the Context of COVID-19
Collections of Defaulted Loans
Beginning March 13, 2020,80 ED halted involuntary collections practices, which include
administrative wage garnishment; offset of federal income tax returns, Social Security benefits,
and certain other federal benefits; and civil litigation. In addition, DRG and GAs halted proactive
collections activities (i.e., did not make collection calls and send letters or billing statements to
defaulted borrowers) for all ED-held student loans (i.e., all Direct Loan program loans, and FFEL
and Perkins Loan program loans held by ED) and defaulted GA-held FFEL program loans,81
respectively.82 However, borrowers could contact the DRG and GAs to continue repayment
arrangements they had made prior to implementation of this policy, to enter into a loan
rehabilitation arrangement or to consolidate their loans out of default.83 Although ED had
previously specified that the cessation of involuntary collections was effective through September
30, 2024, reports indicate that ED subsequently stated “involuntary collections will not occur
before 2025.”84
Borrowers of ED-held loans and defaulted GA-held loans whose federal tax refund or Social
Security benefits were withheld on or after March 13, 2020, or whose wages were garnished on or
after March 13, 2020, could have any offset portion returned to them.85 Borrowers of defaulted
80 ED, Office of Federal Student Aid, “COVID-19 Emergency Relief and Federal Student Aid,” https://studentaid.gov/
announcements-events/covid-19#defaulted-loans (accessed August 28, 2024) and Adam Minsky, “Key Student Loan
Relief Deadline for Fresh Start Initiative Extended by Biden Administration,” Forbes, September 30, 2024,
https://www.forbes.com/sites/adamminsky/2024/09/30/key-student-loan-relief-deadline-for-fresh-start-extended-by-
biden-administration/.
81 The policy to pause collections activities on defaulted GA-held FFEL program loans was put into place via
administrative action on March 30, 2021. In doing so, ED announced that the policy would apply retroactively to
March 13, 2020. ED, “Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to
Additional Federal Student Loans in Default,” press release, March 30, 2021, https://www.ed.gov/news/press-releases/
department-education-announces-expansion-covid-19-emergency-flexibilities-additional-federal-student-loans-default;
and ED, Office of Postsecondary Education, Dear Colleague Letter GEN-21-03, “Expansion of Collections Pause to
Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021),” May 12, 2021,
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-
defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021.
82 The policy to halt debt collection practices for ED-held loans was originally put into place via administrative action
by ED on March 25, 2020. (ED, “Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for
Student Loan Borrowers, Will Refund More Than $1.8 Billion to Students, Families,” press release, March 25, 2020.)
It is unclear under what authority ED initially effectuated this policy. Subsequently, the CARES Act was enacted,
which required that ED automatically suspend debt collection practices on Direct Loans and ED-held FFEL program
loans through September 30, 2020. While the CARES Act did not provide for a cessation of debt collection on ED-held
Perkins Loan program loans, ED has applied a similar suspension to such loans. (ED, Waivers and Flexibilities, p.
79857.) Subsequently, invoking the HEROES Act, ED extended the policy on numerous occasions. ED, Waivers and
Flexibilities, p. 79857 and ED, Waivers and Flexibilities Update, pp. 61513-61514. For a timeline of the history of
these actions, see CRS In Focus IF12136, Student Loans: A Timeline of Actions Taken in Light of the COVID-19
Pandemic.
83 ED, Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-
events/covid-19/default (accessed April 14, 2023).
84 ED, Office of Federal Student Aid, “COVID-19 Emergency Relief and Federal Student Aid,” https://studentaid.gov/
announcements-events/covid-19 (accessed October 3, 2024); and Michael Stratford, “Biden administration pushes
collections of defaulted student loans to after election,” Politico, October 10, 2024.
85 CRS email communication with ED, August 29, 2024. See also ED, Office of Federal Student Aid, “Get Out of
Default with a Fresh Start,” https://studentaid.gov/announcements-events/default-fresh-start (accessed August 28,
2024).
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GA-held FFEL program loans who made voluntary payments on or after March 13, 2020, could
request a refund for those payments.86
In addition, ED authorized institutions to stop collections activities on defaulted Perkins Loans
that they held upon notification from a borrower, a member of the borrower’s family, or another
reliable source that the borrower was affected by COVID-19.87 This flexibility was available
through the end of an IHE’s payment period that included December 31, 2020, or the end of the
IHE’s payment period “that include[d] the end date for the Federally-declared emergency related
to COVID-19,” whichever was later.88
Satisfactory Repayment Arrangements, Loan Rehabilitation, and
Consolidation Out of Default
To regain Title IV student aid eligibility, a defaulted federal student loan borrower must make six
on-time, voluntary monthly payments on a defaulted loan.89 In addition, loan rehabilitation offers
defaulted borrowers an opportunity to have their loan(s) reinstated as active and to have other
borrower benefits and privileges restored. To rehabilitate a loan, Direct Loan, FFEL, or Perkins
Loan program, borrowers must make nine on-time payments according to generally applicable
procedures.90 Alternatively, a borrower may use the proceeds of a new Direct Consolidation Loan
to pay off one or more defaulted Direct Loan, FFEL, and Perkins Loan program loans. To become
eligible to do so, a borrower must make three consecutive, on-time, full monthly payments on a
defaulted loan.91
ED stated that if a borrower of a defaulted Direct Loan, FFEL, or Perkins Loan program loan
failed to make any of the consecutive monthly payments required to reestablish eligibility for
Title IV federal student aid, to rehabilitate such defaulted loans, or to consolidate such defaulted
loans out of default, the borrower would not be considered to have missed any of those payments.
This was a temporary flexibility that was available in response to the COVID-19 pandemic;
however, ED guidance was inconsistent as to the duration of this policy.92
86 ED, Office of Postsecondary Education, Dear Colleague Letter GEN-21-03, “Expansion of Collections Pause to
Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021,
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-
defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021.
87 ED, Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study
related to Coronavirus (COVID-19),” April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19.
88 ED, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to
Coronavirus (COVID-19),” August 21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19.
89 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b).
90 34. C.F.R. §§674.39, 682.405, 685.211(f).
91 34 C.F.R. §685.102(b).
92 Some guidance stated that this policy was effective through the end of an IHE’s payment period that included
December 31, 2020, or the end of the IHE’s payment period “that include[d] the end date for the Federally-declared
emergency related to COVID-19.” ED, Office of Postsecondary Education, Electronic Announcement, “Updated
deadlines for flexibilities related to Coronavirus (COVID-19),” August 21, 2020, https://fsapartners.ed.gov/knowledge-
center/library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19.
Other guidance stated this policy (at least for Perkins Loans) “remains in effect,” but does not specify an end date. ED,
Waivers and Flexibilities, p. 79862 and ED, Waivers and Flexibilities Update, p. 61513.
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Federal Student Loan Debt Relief in the Context of COVID-19
The Fresh Start Initiative
On April 6, 2022, ED announced a new policy to “eliminate the negative effects of default for
borrowers who defaulted on their federal student loans prior to the pandemic payment pause.”93
Under this Fresh Start initiative, qualifying borrowers of defaulted Direct Loan and FFEL
program loans, as well as borrowers of ED-held defaulted Perkins Loans, had several Title IV
student aid benefits temporarily restored that are otherwise unavailable when a borrower is in
default on their loan.94 Such borrowers also had the opportunity to get out of default and retain
those benefits in the long term.95 Many of the benefits available to borrowers under the initiative
were to be available through October 1, 2024 (often referred to as the Fresh Start period).96
Specifically, ED automatically provided the following benefits to defaulted borrowers.
• ED restored borrowers’ eligibility for Title IV federal student aid.
• ED reported defaulted loans as “current” rather than “in collections” to consumer
reporting agencies.
• ED stopped reporting borrowers’ default status to the Credit Alert Verification
Reporting System (CAIVRS)—a database of individuals who have defaulted on
federal debts and used to prescreen and verify applicant eligibility for various
federal direct and guaranteed loans.97
Qualifying defaulted borrowers who accepted Title IV student aid under the Fresh Start initiative
or who asked to have their loans placed in repayment status were permitted to keep the above-
listed benefits. In addition, other benefits not available to defaulted loan borrowers, such as
eligibility for IDR plans or loan forgiveness programs, were restored to borrowers.98 These
borrowers’ loans were transferred from ED’s DRG to a loan servicer, their defaulted loans were
returned to in repayment status, and ED asked consumer reporting agencies to remove the record
of default from the borrower’s credit report.99 Qualifying defaulted borrowers who did not take
either action during the Fresh Start period were to be subject to collections once more after the
end of the Fresh Start period and were to have their loans reported as in collections to consumer
reporting agencies.100
93 ED, Office of Postsecondary Education, Dear Colleague Letter GEN-22-13, “Federal Student Aid Eligibility for
Borrowers with Defaulted Loans,” August 17, 2022, https://fsapartners.ed.gov/knowledge-center/library/dear-
colleague-letters/2022-08-17/federal-student-aid-eligibility-borrowers-defaulted-loans (hereinafter, “ED, GEN-22-13”).
94 Borrowers with non-ED-held FFEL program loans that defaulted during the student loan payment pause are
ineligible for the Fresh Start initiative, as their loans were restored to active repayment status as a result of the
expansion of COVID-19 student loan relief to defaulted FFEL borrowers announced March 30, 2021.
95 ED, Office of Federal Student Aid, “A Fresh Start for Federal Student Loan Borrowers in Default,”
https://studentaid.gov/announcements-events/default-fresh-start (accessed August 22, 2024). For additional
information, see ED, GEN-22-13.
96 Adam Minsky, “Key Student Loan Relief Deadline for Fresh Start Initiative Extended by Biden Administration,”
Forbes, September 30, 2024, https://www.forbes.com/sites/adamminsky/2024/09/30/key-student-loan-relief-deadline-
for-fresh-start-extended-by-biden-administration/.
97 For additional information, see Department of Housing and Urban Development, “CAIVRS-Credit Alert Verification
Reporting System,” https://www.hud.gov/program_offices/housing/sfh/caivrs (accessed August 28, 2024).
98 ED is to also take a number of additional steps related to reporting a borrower’s loan status to consumer reporting
agencies. For additional information on the Fresh Start initiative, see ED, “A Fresh Start for Borrowers with Student
Loans in Default,” fact sheet, updated July 11, 2024, https://fsapartners.ed.gov/sites/default/files/2022-08/
FreshStartFactSheet.pdf (hereinafter, “Fresh Start fact sheet”).
99 Fresh Start fact sheet.
100 Fresh Start fact sheet. Although ED had previously specified that the cessation of involuntary collections was
(continued...)
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Federal Student Loan Debt Relief in the Context of COVID-19
While typically a defaulted loan may only be rehabilitated once, ED stated that borrowers who
could not take advantage of Fresh Start but who instead chose to rehabilitate their defaulted loans
during the Fresh Start period would not have that rehabilitation count as their one opportunity to
rehabilitate their loan.101 Therefore, if the borrower defaults on the same loan again at a later time,
they may be able to rehabilitate the loan.
Reporting to Consumer Reporting Agencies
Information about a borrower’s federal student loans is reported to nationwide consumer
reporting agencies on a regular basis. Information reported includes items such as loan amount
and repayment status (e.g., whether a borrower is current on making payments).102
ED stated it would ensure that any payment that was been suspended under the payment pause
described above would be reported to a consumer reporting agency as if it were a regularly
scheduled payment made by the borrower.103 In addition, GAs that held defaulted FFEL program
loans for which a default claim was paid on or after March 13, 2020, and prior to the end of the
payment pause period for ED-held loans were to request that consumer reporting agencies delete
the record of default for such loans from the borrower’s credit report.104
Loan Cancellation, Forgiveness, and Discharge
The Title IV federal student loan programs offer borrowers the opportunity to have their
obligation to repay their loans discharged in a variety of circumstances. In response to the
COVID-19 pandemic, a variety of flexibilities related to these preexisting opportunities were
made available. These included waivers of certain Public Service Loan Forgiveness and Teacher
Loan Forgiveness program requirements and flexibilities with respect to Borrower Defense to
Repayment and Total and Permanent Disability Discharge. In addition, in August 2022, invoking
the HEROES Act of 2003, ED announced a newly established student loan cancellation policy
(referred to by ED as “one-time student loan debt relief”) that would have been available to the
majority of Title IV student loan borrowers. However, the policy was not implemented, as the
Supreme Court ruled that the policy exceeded ED’s authority under the HEROES Act.105
effective through September 30, 2024, including for borrowing eligible for the Fresh Start Initiative, reports indicate
that ED subsequently stated “involuntary collections will not occur before 2025.” ED, Office of Federal Student Aid,
“COVID-19 Emergency Relief and Federal Student Aid,” https://studentaid.gov/announcements-events/covid-19,
accessed October 3, 2024 and Michael Stratford, “Biden administration pushes collections of defaulted student loans to
after election,” Politico, October 10, 2024.
101 Fresh Start fact sheet.
102
See, for example, ED, “Master Promissory Note: Direct Subsidized Loans and Direct Unsubsidized Loans, William
D. Ford Federal Direct Loan Program,” OMB No. 1845-0007, https://fsapartners.ed.gov/sites/default/files/attachments/
2020-04/SubUnsubMPN.pdf.
103 ED, “Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program,
William D. Ford Federal Direct Loan Program, and Federal-Work Study Programs,” 86 Federal Register 5008, January
19, 2021 and ED, Waivers and Flexibilities Update, p. 61513.
104 ED, Office of Postsecondary Education, Dear Colleague Letter GEN-21-03, “Expansion of Collections Pause to
Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021),” May 12, 2021,
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-
defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021.
105 Biden v. Nebraska, S. Ct. 233, 2376 (2023).
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Federal Student Loan Debt Relief in the Context of COVID-19
One-Time Student Loan Debt Relief
On August 24, 2022, ED invoked the HEROES Act and announced a new student loan
cancellation policy that would have made available to millions of federal student loan borrowers
up to $20,000 of loan cancellation benefits per borrower.106 Specifically, the Biden Administration
planned to cancel the following:107
• up to $10,000 in student loans for borrowers whose annual income in 2020 or
2021 was less than $125,000 (for individuals or married borrowers who file their
federal income taxes separately), or $250,000 (for married couples filing jointly,
heads of households, or qualifying widow[er]s); borrowers enrolled in
postsecondary education as dependent students between July 1, 2021, and June
30, 2022, would have been eligible for cancellation based on parental income;
and
• an additional $10,000, for a total of up to $20,000, in student loans for borrowers
who met the above criteria and received at least one Pell Grant in any amount at
any point.
Borrowers’ cancellation benefits would have been capped at the amount of their outstanding debt.
For example, if a borrower were eligible for $20,000 in loan cancellation benefits but had an
outstanding balance of $15,000 in qualifying student loans, the individual would have only
received $15,000 in loan cancellation benefits.
These benefits would have been available for ED-held loans (including FFEL and Perkins Loan
program loans) and defaulted FFEL program loans that were held by a GA. Except for
Consolidation Loans, the policy would have required that loans had been disbursed on or before
June 30, 2022, to qualify. For Consolidation Loans, only the underlying loans that were repaid by
the Consolidation Loan would have had to be disbursed on or before June 30, 2022. Additionally,
Direct Consolidation Loans comprising any FFEL or Perkins Loan program loans not held by ED
would have been eligible for debt relief, so long as the borrower applied for consolidation before
September 29, 2022.108
Borrowers who (1) “successfully appl[ied] for and receive[d]” this loan cancellation benefit109
and (2) who made voluntary payments on their qualifying loans during the COVID-19 payment
pause that brought their outstanding loan balance below the maximum amount of debt relief for
which they would have been eligible but who did not repay their loan in full would have
automatically received a refund of those voluntary payments. Refund amounts would have been
equal to the difference between the maximum amount of loan cancellation for which the borrower
106
For additional information on the new student loan cancellation policy, see CRS Insight IN11997, The Biden
Administration’s One-Time Student Loan Debt Relief Policy under the HEROES Act of 2003. For information on the
asserted HEROES Act authority, see CRS Legal Sidebar LSB10997, Supreme Court Invalidates Student Loan
Cancellation Policy Under the HEROES Act.
107 ED, Office of Federal Student Aid, “One-Time Student Loan Debt Relief,” https://studentaid.gov/debt-relief-
announcement/one-time-cancellation, accessed April 14, 2023, (site modified); and ED, Office of Federal Student Aid,
“The Biden-Harris Administration’s Student Debt Relief Plan Explained,” https://studentaid.gov/debt-relief-
announcement (accessed August 30, 2024).
108 ED, Office of Federal Student Aid, “One-Time Student Loan Debt Relief,” https://studentaid.gov/debt-relief-
announcement/one-time-cancellation, accessed April 14, 2023 (site modified).
109 Ibid.
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Federal Student Loan Debt Relief in the Context of COVID-19
would have been eligible and the borrower’s outstanding loan balance at the time of
cancellation.110
ED indicated that qualifying borrowers would have been able to receive the one-time student loan
debt relief benefit in one of two ways. First, ED estimated that nearly 8 million borrowers would
have been eligible to receive the benefit automatically, based on relevant income data then
available to ED.111 Such borrowers would not have been required to take any action and would
have been informed by ED of the debt relief they would receive; however, borrowers would have
been given the option to opt out of receiving the automatic debt relief. Borrowers for whom ED
did not have relevant income data would have been required to apply to ED for debt relief
benefits.
This policy was not implemented because on June 30, 2023, the Supreme Court ruled that the
policy exceeded ED’s authority under the HEROES Act.112
Public Service Loan Forgiveness
The PSLF program provides Direct Loan borrowers who, on or after October 1, 2007, are
employed full-time in certain public service jobs for 10 years while concurrently making 120
qualifying monthly payments on their loans with the opportunity to have any remaining balance
of the principal and interest on their Direct Loans forgiven.113
In October 2021, in response to the COVID-19 emergency, ED announced a series of limited-
time waivers of numerous PSLF program rules114 available to borrowers through October 31,
2022 (referred to by ED as the Limited PSLF Waiver). At the time of the announcement, PSLF
program regulations specified that loan payments were considered PSLF-qualifying if they were
separate monthly payments (i.e., not greater than the required monthly payment) that were on-
time (within 15 days of the scheduled due date), in full, scheduled (i.e., made when required, not
during periods of deferment or forbearance), and made under a qualifying repayment plan (in
most cases, an IDR plan).115 Payments made on any loans prior to consolidation did not count
toward the required 120 payments. Periods of service performed to receive benefits under the
Teacher Loan Forgiveness program could not be counted toward PSLF qualifying employment.116
A borrower was required to be employed full-time in qualifying public service at the time they
applied for and received forgiveness.
110 Ibid.
111 ED, “Biden-Harris Administration Announces Final Student Loan Pause Extension Through December 31 and
Targeted Debt Cancellation to Smooth Transition to Repayment,” press release, August 24, 2022, https://www.ed.gov/
news/press-releases/biden-harris-administration-announces-final-student-loan-pause-extension-through-december-31-
and-targeted-debt-cancellation-smooth-transition-repayment.
112 Biden v. Nebraska, S. Ct. 233, 2376 (2023).
113 For additional information, see CRS Report R45389, The Public Service Loan Forgiveness Program: Selected
Issues.
114 These waivers also applied to TEPSLF. ED, Office of Federal Student Aid, “The Limited PSLF Waiver Opportunity
Ended on Oct. 31, 2022,” https://studentaid.gov/announcements-events/pslf-limited-waiver (accessed August 22, 2024)
(hereinafter, “ED, PSLF Waivers”).
115 Effective July 1, 2023, ED implemented amended PSLF regulations that changed many requirements for a payment
to be PSLF-qualifying. Many of those changes mirrored aspects of the Limited PSLF Waiver. See ED, “Institutional
Eligibility Under the Higher Education At of 1965, as Amended; Student Assistance General Provisions; Federal
Perkins Loan Program; Federal Family Education Loan Program; and William D. Ford Direct Loan Program,” 87
Federal Register 65904, November 1, 2022.
116 For additional information on the Teacher Loan Forgiveness program, see CRS Report R43571, Federal Student
Loan Forgiveness and Loan Repayment Programs.
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The waivers were intended to enable borrowers to receive credit for past periods of repayment
that would not otherwise qualify for PSLF.117 Through October 31, 2022, a borrower could
receive PSLF payment credit for the following periods, so long as the borrower met the requisite
public service employment requirements during those periods of repayment:118
• periods of repayment119 on Direct Loan program, FFEL program, Perkins Loan
program, and other older HEA authorized program loans (e.g., National Defense
Student Loans)120; borrowers were required to submit an application to
consolidate their loan(s) into a Direct Loan program loan by October 31, 2022, to
receive payment credit;
• periods of repayment, even if payments were made according to a nonqualifying
repayment plan, made late, or made for less than the amount due;
• periods of repayment on loans before consolidation, even if payments were made
according to a nonqualifying repayment plan, made late, or made for less than the
amount due;
• periods of deferment before 2013;
• periods of economic hardship deferment on or after January 1, 2013;
• periods of forbearance of 12 consecutive months or greater;
• periods of forbearance of 36 cumulative months or greater, with any combination
of forbearance periods counting toward the cumulative amount;
• periods of military service deferment or active military state duty or military
mobilization forbearance121; and
• periods of COVID-19 pandemic-related deferment or forbearance between
March 20, 2020, and April 30, 2022, for borrowers with FFEL program loans
held by private lenders and Perkins Loan program loans held by IHEs.122
In addition, through October 31, 2022, ED waived the requirement that a borrower be employed
full-time in qualifying public service at the time of application for and forgiveness under PSLF.
ED also waived the prohibition against periods of service performed to receive benefits under the
117 ED, “U.S. Department of Education Announces Transformational Changes to the Public Service Loan Forgiveness
Program, Will Put Over 550,000 Public Service Workers Closer to Loan Forgiveness,” press release, October 6, 2021,
https://www.ed.gov/news/press-releases/us-department-education-announces-transformational-changes-public-service-
loan-forgiveness-program-will-put-over-550000-public-service-workers-closer-loan-forgiveness.
118 ED, PSLF Waivers (accessed August 22, 2024).
119 ED indicated that a “period of repayment” was a calendar month during which a borrower is “in repayment” status
(i.e., not in default, deferment, or forbearance) on their loan.
120 According to ED, borrowers of Health Education Assistance Loans (HEAL; previously made under the Public
Health Service Act) could also receive PSLF payment credit, but only if they first consolidated those loans with Direct
Loan program, FFEL program, Perkins Loan program, or older HEA program loans. It appears that such borrowers
could only receive payment credits on the HEAL program loan for repayment and employment periods associated with
payment periods of their HEA loans. For example, if a borrower, while employed in a PSLF qualifying job, was in
repayment status for 100 payment periods on their HEAL program loan and 60 payment periods on a Direct Loan
program Unsubsidized Loan and then consolidated those two loans into a Direct Consolidation Loan before October
31, 2022, it appears that the borrower could receive credit for 60 payment periods on the new Direct Consolidation
Loan. CRS email communication with ED, January 6, 2022.
121 ED, “U.S. Department of Education Announces Transformational Changes to the Public Service Loan Forgiveness
Program, Will Put Over 550,000 Public Service Workers Closer to Loan Forgiveness,” press release, October 6, 2021,
https://www.ed.gov/news/press-releases/us-department-education-announces-transformational-changes-public-service-
loan-forgiveness-program-will-put-over-550000-public-service-workers-closer-loan-forgiveness.
122 CRS email communication with ED, January 7, 2022.
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Teacher Loan Forgiveness program also counting toward periods of PSLF qualifying
employment.123
For borrowers with Direct Consolidation Loans Relationship Between PSLF and
(regardless of whether the loan repaid Direct IDR Account Adjustment
Loan program, FFEL program, Perkins Loan Although the Limited PSLF Waiver ended
program, or other older HEA program loans), if October 31, 2022, borrowers may receive
the underlying loans had differing numbers of some similar benefits under the IDR account
qualifying payments, ED was to credit the entire adjustment (see the “Income-Driven
Repayment Plan Account Adjustment”
Direct Consolidation Loan with the largest section). Specifically, periods for which
number of qualifying payment periods of the borrowers receive payment credits under
loans that were consolidated. For example, if a the IDR account adjustment between
borrower had 50 qualifying payment periods on November 1, 2022, and the date the IDR
account adjustment is made are to also
one FFEL program Subsidized Stafford Loan and count towards the 120 required PSLF
100 qualifying payment periods on a second payments, so long as the borrower meets
FFEL program Subsidized Stafford Loan and the requisite public service employment
consolidated those two loans into a Direct requirements during those periods.
Consolidation Loan, the borrower would receive
credit for 100 PSLF qualifying payments on the new Direct Consolidation Loan.124
Borrowers with Direct Loan program loans and who had previously submitted a Public Service
Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application
(PSLF form)125 were to automatically receive credit for prior repayment periods during which
their employment was determined to be PSLF qualifying. Borrowers who had not previously
submitted a PSLF form or who needed to submit additional PSLF forms to ED could receive
credit for prior repayment periods if they took one of the following steps:
1. used the PSLF Help Tool126 by October 31, 2022, to create a PSLF form that is
eventually approved by ED (even if the form had not been signed by a
borrower’s qualifying employer and submitted to ED by that date);
2. used the PSLF Help Tool by October 31, 2022, but were unable to print the PSLF
form for signature or submission because ED had not yet completed a review of
their employer’s eligibility, and the employer is later determined by ED to be
eligible; or
123 ED, PSLF Waivers (accessed August 22, 2024).
124 Parent PLUS Loans on their own, or consolidated with no other type of loan, were ineligible to receive additional
months of qualifying payments under the PSLF waivers. However, if a borrower consolidated a Parent PLUS Loan
with other types of loans (e.g., a FFEL program Subsidized Stafford Loan), they could receive credit for PSLF
qualifying payments on the consolidation loan based on repayment periods on the non-Parent PLUS Loan. For
example, if a borrower, while employed in a PSLF-qualifying job, was in repayment status for 36 payment periods on a
FFEL program Parent PLUS Loan and 60 payment periods on a FFEL program Subsidized Stafford Loan and then
consolidated those two loans into a Direct Consolidation Loan before October 31, 2022, the borrower would receive
credit for 60 PSLF-qualifying payments on the new Direct Consolidation Loan. See ED, PSLF Waivers (accessed
August 22, 2024).
125 Borrowers submit a PSLF form to ED to document their employment in qualifying public service and to apply for
PSLF and TEPSLF benefits. ED, “Public Service Loan Forgiveness (PSLF), & Temporary Expanded PSLF (TEPSLF)
Certification and Application,” OMB No. 1845-0110, https://studentaid.gov/sites/default/files/public-service-
application-for-forgiveness.pdf.
126 The PSLF Help Tool may be used by borrowers to search a database of PSLF qualifying employers, learn which
actions they may need to take to be eligible for PSLF or TEPSLF, and generate the PSLF form. For additional
information, see ED, Office of Federal Student Aid, “Complete the Public Service Loan Forgiveness (PSLF) Form with
the PSLF Help Tool,” https://studentaid.gov/pslf/.
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3. submitted a manual PSLF form (a PSLF form not generated by the PSLF Help
Tool) that is eventually approved by ED with their employer’s signature date on
or before October 31, 2022.127
Borrowers with one or more FFEL program, Perkins Loan program, or older HEA loan program
loans were required to submit an application for a Direct Consolidation Loan through
StudentAid.gov128 by October 31, 2022.129 It is unclear whether such borrowers were required to
take one of the steps described above by October 31, 2022, as well.
Borrowers who, with the application of the PSLF payment credits, made more than 120 payments
on an existing Direct Loan, including on an existing Direct Consolidation Loan, were to
automatically receive a refund for the payments made in excess of those 120 payments.
Borrowers could not receive refunds for payments in excess of 120 payments on loans underlying
a Direct Consolidation Loan, including Direct Loans that were themselves consolidated into a
Direct Consolidation Loan.130 Borrowers who previously received PSLF program benefits could
not receive a refund for payments that did not count as PSLF-qualifying previously but that
counted as PSLF-qualifying under the Limited PSLF Waiver.131
Teacher Loan Forgiveness
The Teacher Loan Forgiveness132 program provides loan forgiveness benefits (of up to $17,500)
to borrowers of qualifying Direct Loan and FFEL program loans.133 To qualify for benefits, a
borrower must serve as a full-time teacher for at least five consecutive complete academic years
in a qualifying school or public education service agency that serves children from low-income
families.
The CARES Act specified that ED was to waive the requirement that years of qualifying teaching
service be consecutive if an individual’s service was temporarily interrupted due to a qualifying
emergency, and after such temporary disruption, the borrower resumed teaching and ultimately
completed a total of five years of qualifying service. Qualifying service could include service
performed before, during, and after the qualifying emergency.134
127 ED, PSLF Waivers (accessed August 22, 2024).
128 StudentAid.gov is the Office of Federal Student Aid’s primary customer-facing website for parents, students, and
borrowers that contains information on the HEA Title IV programs and provides public access to various tools and
resources related the Title IV aid programs, such as the FAFSA and applications for various student loan forgiveness
options (e.g., PSLF and IDR plans).
129 In general, a set of loans may be consolidated only once. However, the HEA specifies that a Direct Consolidation
Loan may be used to repay a previously obtained Direct Consolidation or FFEL Consolidation Loan for the purposes of
applying for PSLF. HEA §428C(a)(3)(B)(i)(V)(bb).
130 For example, if a borrower, while employed in a PSLF qualifying job, was in repayment status for 150 payments
periods on their FFEL program loan and then consolidated the FFEL program loan into a Direct Consolidation Loan
before October 31, 2022, the borrower would not receive a refund for the 30 payments made in excess of 120
payments.
131 ED, PSLF Waivers (accessed August 22, 2024).
132 HEA §§428J, 460.
133 For purposes of the Teacher Loan Forgiveness program, qualifying loans include Direct Loan program and FFEL
program Subsidized Loans, Unsubsidized Loans, and Consolidation Loans (to the extent they are used to repay a
Subsidized or Unsubsidized Loan). Borrowers must have had no outstanding balance on any federal student loan made
through a program authorized under HEA Title IV on October 1, 1998, or as of the date the borrower first borrowed
such loan after October 1, 1998.
134 CARES Act §3519.
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Borrower Defense to Repayment
In certain circumstances, borrowers may seek discharge of their Title IV student loans by
asserting as a borrower defense to repayment (BDR) certain acts or omissions of an IHE, if the
cause of action directly relates to the loan or educational services for which the loan was
provided. Although statutory language specifies BDR as an available discharge option only for
Direct Loan borrowers,135 FFEL and Perkins Loan program borrowers may consolidate their loans
into a Direct Loan program Consolidation Loan to pursue BDR discharge.136 Three different
standards for evaluating BDR discharge may be applied to eligible student loans. The applicable
BDR standards to be used largely depend on when the Direct Loan was made.137 For Direct
Consolidation Loans made on or after July 1, 2020, the standard applicable to loans made on or
after July 1, 2020, applies.
ED specified that FFEL and Perkins Loan program borrowers who submitted a BDR application
prior to July 1, 2020, and who needed to consolidate those loans into a Direct Consolidation Loan
to receive BDR relief, would have their BDR eligibility evaluated by the standards for Direct
Consolidation Loans disbursed between July 1, 2017, and July 1, 2020.138
Total and Permanent Disability Discharge
Borrowers may have their liability to make further payments on their Direct Loan program loans,
FFEL program loans, and Perkins Loan program loans discharged upon being determined to have
a total and permanent disability (TPD).139 Borrowers may be determined to have a total and
permanent disability if they are
• certified by a physician as unable to engage in any substantial gainful activity
due to a physical or mental impairment that can be expected to result in death,
has lasted continuously for at least 60 months, or can be expected to last
continuously for 60 months;
• documented by the Social Security Administration (SSA) as receiving Social
Security Disability Insurance or Supplemental Security Income benefits and that
their next scheduled disability review will be within five to seven years from the
date of their most recent SSA disability determination; or
135 HEA §455(h). For additional information on BDR, see CRS Report R44737, The Closure of Institutions of Higher
Education: Student Options, Borrower Relief, and Other Implications.
136 34 C.F.R. §685.212(k)(2).
137 Effective July 1, 2023, ED regulations specify a new BDR standard to be applicable to BDR applications received
on or after July 1, 2023, or pending with ED on July 1, 2023 (regardless of the date the loan was disbursed). (ED, Final
Rule, November 1, 2022, pp. 66055-66073.) However, federal courts have stayed the new regulations’ effective date,
preventing their implementation. Career Colleges and Schools of Tex. v. U.S. Dep't of Educ., 98 F.4 th 220, 256 (5th Cir.
2024).
138 ED, Waivers and Flexibilities, p. 79863. Some view the BDR standards for loans disbursed between July 1, 2017,
and July 1, 2020, to be more beneficial to borrowers than the standards that apply to loans made on or after July 1,
2020. See, for example, Letter from AFL-CIO, AFSCME, and Allied Progress, et al. to Senator Dick Durbin and
Representative Susie Lee, December 9, 2019, https://ticas.org/wp-content/uploads/2019/12/Coalition-Letter-on-BD-
CRA_.pdf.
139 HEA §§437(a), 455(a)(1), and 464(c)(1)(F)(ii); 34 C.F.R. §§674.61, 682.402, and 685.213.
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• documented by the Department of Veterans Affairs as having a service connected
disability (or disabilities) that is 100% disabling or they are totally disabled based
on an individual unemployability rating.140
During the majority of the suspension period, regulations specified that a TPD discharge
approved based on the first or second criterion above was granted on a conditional basis for a
three-year period141 that began on the date of discharge.142 During the three-year period,
borrowers could be subject to having their loans reinstated under a variety of circumstances,
including failing to annually submit to ED documentation of their annual earnings from
employment.143
On March 29, 2021, ED announced that borrowers who had a TPD discharge approved based on
the first or second criterion above would not be required to submit earnings documentation during
the COVID-19 emergency. This policy was retroactive to March 13, 2020. Borrowers whose
loans were reinstated because they did not submit earnings documentation between March 13,
2020, and the end of the COVID-19 emergency were to have their loan discharge restored and
their three-year monitoring period was to resume based on their original discharge date.144
Additional Flexibilities
In addition to the above-described administrative and congressional actions that were taken in
response to COVID-19, further flexibility and authority was provided through the HEROES Act.
As detailed in the text box titled “The HEROES Act,” the Secretary of Education is authorized to
waive or modify statutory and regulatory requirements that apply to the HEA Title IV student aid
programs in an effort to assist affected individuals; however, it may only be used in connection
with a war or other military action or national emergency. There are three categories of affected
individuals:
1. persons on active duty or qualifying National Guard duty during a war, military
operation, or national emergency;
2. persons who reside or are employed in an area that is declared a disaster area in
connection with a national emergency; and
140 For additional information on TPD discharge, see CRS Report R45931, Federal Student Loans Made Through the
William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers.
141 A TPD discharge approved based on the third criterion above is permanent upon being granted (i.e., is not granted
on a conditional basis).
142 Effective July 1, 2023, ED regulations expanded the types of documentation and criteria that may be used to
determine whether a borrower is totally and permanently disabled. The new regulations also eliminated most
circumstances under which a borrower’s loan would be reinstated during the three-year monitoring period. ED, Final
Rule, November 1, 2022, pp. 66059-66060.
143 During the majority of the suspension period, a borrower’s loans could be reinstated if the borrower had annual
earnings from employment in excess of 100% of the federal poverty guidelines for a family of two. To show
compliance with this requirement, borrowers were required annually to submit to ED documentation of their annual
earnings from employment. 34 C.F.R. §§674.61 (2022), 682.402 (2022), and 685.213 (2022).
144 ED, “Education Department Announces Relief for Student Loan Borrowers with Total and Permanent Disabilities
During the COVID-19 Emergency,” press release, March 29, 2021, https://www.ed.gov/news/press-releases/education-
department-announces-relief-student-loan-borrowers-total-and-permanent-disabilities-during-covid-19-emergency; and
ED, Office of Federal Student Aid, “COVID-19 Relief: Total and Permanent Disability Discharge,”
https://studentaid.gov/announcements-events/covid-19/disability-discharge, accessed April 17, 2023, (site modified).
ED also indicated that if an individual’s TEACH Grant service obligation was reinstated because they failed to submit
annual earnings documentation on or after March 13, 2020, it would return the individual’s TEACH Grant service
obligation to its discharge status.
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3. persons who suffered direct economic hardship as a direct result of a war or other
military operation or national emergency.
ED indicated that some of the administrative actions described throughout this report were taken
under the authority of the HEROES Act. However, other examples of relief that may have been
available to student loan borrowers under the HEROES Act, that were articulated by ED prior to
the COVID-19 pandemic145 and that could have been applicable to student loan borrowers in light
of the pandemic include the following:
• For borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan
programs who are in the 1st or 2nd categories of affected individuals, the initial
grace period excludes any period, not to exceed three years, during which a
borrower is an affected individual.
• Borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan
programs who were in an in-school status but left school because they became a
1st or 2nd category affected individual may retain their in-school status for up to
three years. During this period, the Secretary pays any interest that accrues on a
FFEL Stafford Loan.
• Borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan
programs who were in an in-school deferment or a graduate fellowship deferment
but left school because they became a 1st or 2nd category affected individual may
retain their deferment for a period of up to three years during which they are
affected. During this period, the Secretary pays any interest that accrues on a
FFEL Stafford Loan.
• For borrowers of Perkins Loans who are in the 1st or 2nd categories of affected
individuals, any forbearance granted based on their status as an affected
individual is excluded from the usual three-year limit on forbearance. Also, for
these categories of affected individuals, borrowers of Perkins Loans may be
granted forbearance based on an oral request and without written documentation
for a one-year period and an additional three-month transition period.
• Borrowers of FFEL program loans who are in the 1st or 2nd categories of affected
individuals may be granted forbearance based on an oral request and without
written documentation for a one-year period and an additional three-month
transition period.
• For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and
FFEL program borrowers) or Perkins Loan Cancellation (Perkins Loan program
borrowers) on the basis of continuous or uninterrupted qualifying service, such
service will not be considered interrupted by any period during which they are in
the 1st or 2nd categories of affected individuals or during a three-month transition
period.
145 For information on these waivers and modifications issued, see ED, “Federal Student Aid Programs (Student
Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and the
Federal Direct Loan Program),” 82 Federal Register 45465-45471, September 29, 2017. These waivers and
modifications expired on September 30, 2022; it is unclear whether they continued to remain in effect for the COVID-
19 national emergency.
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• For borrowers who defaulted on Direct Loan, FFEL, or Perkins Loan program
loans and are seeking to rehabilitate their loans by making nine on-time payments
according to generally applicable procedures,146 any payments missed during
periods when they are in the 1st or 2nd categories of affected individuals or during
a three-month transition period shall not be considered an interruption in the
series of payments required for loan rehabilitation.
• For borrowers who defaulted on Direct Loan, FFEL, or Perkins Loan program
loans and who seek to reestablish eligibility for Title IV federal student aid by
making six consecutive on-time payments, any payments missed during periods
when they are in the 1st or 2nd categories of affected individuals or during a three-
month transition period shall not be considered an interruption in the series of
payments required for purposes of reestablishing Title IV eligibility.
• For borrowers who defaulted on Direct Loan or FFEL program loans and are
seeking to consolidate loans out of default, any payments missed during the
period when they are in the 1st or 2nd category of affected individuals or during a
three-month transition period shall not be considered an interruption in the series
of payments required for purposes of reestablishing Title IV aid eligibility.
• Borrowers who are repaying their Direct Loan or FFEL program loans according
to an IDR plan and because of their status as 1st or 2nd category affected
individuals are unable to provide information normally required annually to
document their income and family size may maintain their current payment
amount for a period of up to three years, including a three-month transition
period. This flexibility is made in lieu of having their payment amount adjusted
to be based on a standard 10-year repayment plan or an alternative repayment
plan, as applicable.
Author Information
Alexandra Hegji
Specialist in Social Policy
146 34 C.F.R. §§674.39, 682.405, 685.211(f).
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
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