Federal Student Loans and COVID-19: What You Need to Know

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The ongoing financial impact of the COVID-19 pandemic has left many people scrambling to handle their monthly bills — including federal student loan payments. However, the good news is that federal student loan payments and interest have been paused by the CARES Act through at least Dec. 31, 2022.

Also keep in mind that current college students can still take out federal student loans to pay for school and might even be eligible for more aid depending on their financial situation.

Here’s what you should know about the effect of COVID-19 on federal student loans:

• How has the COVID-19 pandemic affected federal student loans?
• How does the CARES Act affect student loans?
• How to manage existing student loans
• Private student loans and the CARES Act

How has the COVID-19 pandemic affected federal student loans?

The coronavirus has impacted federal student loans for both new and current federal student loan borrowers. If you are looking to take out federal student loans for school or already have federal student loans in repayment, here are some changes to be aware of:

For new federal student loans

If you’re in school or starting college during the 2021-2022 academic year, the process to apply for federal student loans has remained the same:

1. Complete the FAFSA. You’ll provide your personal and financial information when you submit the Free Application for Federal Student Aid (FAFSA). If you’re a dependent student, you’ll generally also need to include information from your parents.
2. Accept your financial aid. After your school has reviewed your FAFSA information, you’ll receive a financial aid award letter detailing what federal student loans and other financial aid you’re eligible for. You can then decide which aid you’d like to accept.

Learn More:

• Gap Years and COVID19: What You Need to Know About Student Loans
• Federal vs. Private Student Loans: 5 Differences

For federal student loans in repayment

Payments and interest on federal student loans have been suspended through at least Dec. 31, 2022, by the CARES Act.

Note that eligible borrowers don’t need to do anything to apply for these benefits — servicers of federal student loans have automatically placed qualifying loans in administrative forbearance.

If you have any questions regarding your loans, be sure to contact your servicer.

While having your student loans in forbearance can take pressure off of your finances, keep in mind that it will also extend your repayment date.

If you’re wondering how long it’ll take to pay off your student loans, enter your current loan information into the calculator below to find out. You can use the slider to see how increasing your payments can change the payoff date.

Check Out: Federal Direct PLUS Student Loans: What to Know Before Borrowing

How does the CARES Act affect student loans?

The CARES Act, which was signed into law on March 27, 2020, outlined the automatic payment and interest suspension for current federal student loan borrowers.

Originally, this suspension was slated to last until Dec. 31, 2020, but it has since been extended four times — first to Sep. 30, 2021, to Jan. 31, 2022, to May 1, 2022, and the current end date of Dec. 31, 2022. It might still be extended in the future.

Here are the federal student loans that are eligible for these benefits under the CARES Act. Keep in mind that to qualify, the loans must be owned by the Department of Education, not a commercial lender as might be the case for certain types of loans.

• Defaulted and non-defaulted Direct Loans
• Defaulted and non-defaulted FFEL Program loans
• Defaulted FFEL Program loans managed by guaranty agencies
• Defaulted and non-defaulted Federal Perkins Loans
• Defaulted HEAL loans

How to manage existing student loans

If you have federal student loans in repayment, you don’t need to worry about filing anything to have your payments and interest suspended — your servicer will automatically apply these benefits to your loans.

However, in addition to the suspension, there are also other federal repayment options that might help you reduce or postpone your payments, including:

• Deferment: This allows you to temporarily postpone your loan payments. There are several situations that might qualify you for student loan deferment, such as financial hardship, unemployment, returning to school, undergoing cancer treatment, and more. Keep in mind that interest might continue to accrue in a deferment period, depending on the type of loan you have.
• Forbearance: This is another way to pause your payments for a short time. Unlike loans in deferment, loans will always continue to accrue interest while in forbearance. There are a few circumstances that might make you eligible for federal forbearance, including financial hardship, medical expenses, or changes to your employment. Servicers can also grant forbearances on a case-by-case basis.
• Income-driven repayment: Under an income-driven repayment (IDR) plan, your payment is based on your discretionary income. There are four IDR plans to choose from: Pay As You Earn, Revised Pay As You Earn, Income-Based Repayment, and Income-Contingent Repayment. Keep in mind that depending on the plan, you could have any remaining balance forgiven after 20 to 25 years of on-time payments.
• Graduated repayment plan: Under a graduated plan, your payments start low and increase every two years. This could be helpful if you expect your income to increase in the future.
• Extended repayment plan: If you sign up for an extended repayment plan, you could have up to 25 years to repay your loans, which will likely give you a lower payment. Just keep in mind that choosing a longer repayment term means you’ll pay more in interest over time.
• Federal consolidation: If you consolidate your federal student loans through a Direct Consolidation Loan, you can extend your repayment term up to 30 years. Unlike private student loan consolidation, federal consolidation doesn’t require a credit check. If you’re considering private vs. federal consolidation, keep in mind that while you’ll likely get a reduced monthly payment through federal consolidation, you won’t get a lower interest rate. However, you’ll still have access to all of your federal benefits and protections.

Private student loans and the CARES Act

Unfortunately, private student loans don’t qualify for CARES Act benefits. But you do have other options. For example, if you refinance your private student loans, you might be able to:

• Get a lower interest rate, which could save you money on interest and potentially help you pay off your loans faster
• Opt for a longer repayment period, which could reduce your monthly payment and lessen the strain on your budget

To qualify for refinancing, you’ll typically need good credit and verifiable income. While you might be able to refinance student loans with bad credit through certain lenders, you’ll likely end up with a higher interest rate compared to the rates offered to borrowers with good credit.

If you’re struggling to get approved for refinancing, consider applying with a cosigner. Even if you don’t need a cosigner to qualify, having one might get you a better rate than you’d get on your own.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in two minutes.

Lender	Fixed rates from (APR)	Variable rates from (APR)	Loan terms (years)	Loan amounts
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	2.94%+	N/A	10, 15, 20	$7,500 up to $500,000 (larger balances require special approval)
Fixed APR: 2.94%+ Variable APR: N/A Min. credit score: Does not disclose Loan amount: $7,500 up to $500,000 Loan terms (years): 10, 15, 20 Max. undergraduate loan balance: $250,000 - $500,000 Time to fund: 4 days Repayment options: Immediate repayment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or noncitizen with proof of residency card, have an acceptable income and credit history or an approved cosigner, and have entered grace or repayment on the loans he or she wants to refinance Customer service: Phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: Kentucky Higher Education Student Loan Corporation Max. graduate loan balance: $250,000 - $500,000 Credible Review: Advantage Education Loan review Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	2.49%+	4.82%+	5, 7, 10, 15, 20	$10,000 up to $250,000 (depending on degree)
Fixed APR: 2.49%+ Variable APR: 4.82%+ Min. credit score: 690 Loan amount: $10,000 to $400,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Military deferment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of Texas Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 - $149,000 Max. Graduate Loan Balance: $200,000 - $400,000 Offers Parent PLUS Refinancing: Does not disclose
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.49%+1	3.84%+1	5, 7, 10, 15, 20	$10,000 to $500,000 (depending on degree and loan type)
Fixed APR: 4.49%+1 Variable APR: 3.84%+1 Min. credit score: Does not disclose Loan amount: $10,000 to $750,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $150,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	3.99%+2	3.44%+2	5, 7, 10, 12, 15, 20	$5,000 to $300,000 (depending on degree type)
Fixed APR: 3.99%+2 Variable APR: 3.44%+2 Min. credit score: Does not disclose Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 12, 15 Repayment options: Military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: All states except for ME Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: College Ave Servicing LLC Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.41%+5	5.23%+5	5, 10, 15, 20	$1,000 to $250,000
Fixed APR: 4.41%+5 Variable APR: 5.23%+5 Min. credit score: 700 Loan amount: $7,500 to $200,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and submit two personal references Customer service: Email, phone Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Granite State Management & Resources (GSM&R) Max. Undergraduate Loan Balance: $150,000 to $249,000 Max. Graduate Loan Balance: $150,000 to $199,000 Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.29%+3	2.48%+3	5, 7, 10, 12, 15, 20	$10,000 to $250,000
Fixed APR: 4.29%+3 Variable APR: 2.48%+3 Min. credit score: 680 Loan amount: $10,000 to $250,000 Loan terms (years): 5, 7, 10, 12, 15, 20 Repayment options: Forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved school Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: Mohela Max. Undergraduate Loan Balance: $250,000 Max. Graduate Loan Balance: $250,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.18%+4	3.67%+4	5, 10, 15, 20	$5,000 to $250,000
Fixed APR: 5.18%+4 Variable APR: 3.67%+4 Min. credit score: 670 Loan amount: $5,000 to $250,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Academic deferment, military deferment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must be U.S. citizen or permanent resident Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: Yes Max undergraduate loan balance: $250,000 Max graduate loan balance: $250,000 Offers Parent PLUS refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	3.94%+ 7	N/A	5, 7, 10, 12, 15, 20	Up to $300,000
Fixed APR: 3.94%+ 7 Variable APR: N/A Min. credit score: 670 Loan amount: Up to $300,000 Loan terms (years): 5, 7, 10, 15, 20 Time to fund: Usually one business day Repayment options: Academic deferral, military deferral, forbearance, death/disability discharge Fees: None Discounts: Autopay Eligibility: Available in all 50 states Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Max. undergraduate loan balance: $300,000 Max. graduate balance: $300,000 Offers Parent PLUS loans: Yes Min. income: None
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.5%+	N/A	7, 10, 15	$10,000 up to the total amount of qualified education debt
Fixed APR: 4.5%+ Variable APR: N/A Min. credit score: 670 Loan amount: $10,000 up to the total amount Loan terms (years): 7, 10, 15 Repayment options: Military deferment, loans discharged upon death or disability Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: AES Max. Undergraduate Loan Balance: No maximum Max. Gradaute Loan Balance: No maximum Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.49%+	N/A	5, 8, 12, 15	$7,500 to $300,000
Fixed APR: 5.49%+ Variable APR: N/A Min. credit score: 670 Loan amount: $7,500 to $300,000 Loan terms (years): 5, 8, 12, 15 Repayment options: Does not disclose Fees: None Discounts: None Eligibility: Must be a U.S. citizen and have and at least $7,500 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 12 months Loan servicer: PenFed Max. Undergraduate Loan Balance: $300,000 Max. Graduate Loan Balance: $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.29%+	N/A	5, 10, 15	$7,500 up to $250,000 (depending on highest degree earned)
Fixed APR: 4.29%+ Variable APR: N/A Min. credit score: 680 Loan amount: $7,500 to $250,000 Loan terms (years): 5, 10, 15 Repayment options: Academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000 Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Rhode Island Student Loan Authority Max. Undergraduate Loan Balance: $150,000 - $249,000 Max. Graduate Loan Balance: $200,000 - $249,000 Offers Parent PLUS Refinancing: Yes
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures

About the author

Emily Guy Birken

Emily Guy Birken is a Credible authority on student loans and personal finance. Her work has been featured by Forbes, Kiplinger’s, Huffington Post, MSN Money, and The Washington Post online.

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