(COVID-19) Federal Student Loans Suspension: What You Need to Know

Updated on

Federal Student Loans Suspension

Clever Girl Finance has received a lot of questions about the recent announcement of the federal student loan suspension from the U.S. Department of Education as a result of the Coronavirus. And so we've put together this article based on this key information.

The federal student loan suspension is part of the 2020 CARES Act Coronavirus Aid, Relief, and Economic Security act) put in place by the U.S. government. It is a way to provide financial relief to individuals and businesses impacted by the global Coronavirus pandemic. It also includes the distribution of stimulus payments to help individuals and businesses get through this difficult season.

Here are the key things relating to your federal student loans that you need to know. We're also sharing additional resources to reference for any future updates.

1. 85% of federal student loan payments have been suspended from March 13th, 2020 until September 30th, 2020

According to the U.S. Department of Education, the federal student loans that are eligible include:

  • Defaulted and non-defaulted Direct Loans
  • Defaulted and non-defaulted FFEL Program loans
  • Federal Perkins Loans

All of these loan payments are suspended from March 13th, 2020 until Sept 30th, 2020.

Keep in mind that not all loans are eligible for suspension. Specifically, some Federal Family Education Loans (FFEL) owned by commercial lenders are not eligible. In addition, Perkins Loans owned by the institution you attended are also not eligible.

Since not all federal student loans are included, you should contact your servicer to confirm the eligibility of your student loans. You can contact them by visiting their websites or over the phone. Keep in mind they might be experiencing high call volume or high site traffic. So be prepared to try again if you can't reach them.

2. Federal student loan suspensions (including interest waivers) are automatic

According to the U.S Department of Education, the eligible student loans are being placed into administrative forbearance. The suspensions are automatic and no further action is required on your part. In addition, all interest accruals and associated capitalization that would occur between March 13th and September 30th, 2020 have been put on hold. This means you will not be charged interest over this 6 month period.

For peace of mind, log in to your loan accounts or contact your servicer directly to confirm that this is the case for your loans.

3. All changes are retroactive to March 13th, 2020

Based on the announcement, all changes related to the suspension of federal student loans are retroactive to March 13th, 2020. And so, If you've made a payment since then, you can request a refund by contacting your student loan servicer. All changes should have been put in place by loan servicers as of April 10th, 2020.

4. People enrolled in a loan forgiveness program will still receive credit

If you are in a loan forgiveness program, you will still receive credit toward your forgiveness program as long as you are still working full time for a qualifying employer. According to the U.S department of education, you will receive credit toward PSLF for the period of suspension as though you made on-time monthly payments.

5. Collections and garnishments are on hold and will not accrue interest

Collections on defaulted federal loans, including wage and tax refund garnishments, have been put on hold through September. 30th 2020. In addition, defaulted loans will not accrue interest. The Department of Education is also refunding any garnishments made since March 13.

6. Many loan servicers have established separate programs for non-eligible loans

If your federal student loan falls into the category of loans that are not eligible, contact your loan servicer directly. Many have established independent relief programs. The same applies to private student loan servicers; many of them have also established relief programs for their loan holders.

7. You can keep making loan payments but they will not be automatically debited

If you are able, you can keep paying your loans. However, keep in mind that auto-debits have been suspended. You may need to contact your loan servicer to make manual payments. If you continue to make payments on your loans over this 6-month period, you have the opportunity to make a major dent in your principal balance since there will be 0% interest.


For more details and for the latest info, visit the U.S. Department of Education's announcement page specific to Coronavirus at studentaid.gov. They are also actively updating an in-depth Q&A page as it relates to school closures, getting additional financial aid, income-driven repayment plans and more.

You can also listen to Melisa Boutin, our Clever Girl Finance student loan expert discuss these details on this episode of the Clever Girls Know Podcast.

Scroll to Top