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Coronavirus: Information for Student Borrowers

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Student Loans


UPDATE: The Biden administration has announced a final extension of the student loan relief through January 31, 2022, for loans owned by the federal government. Additionally, any Federal Family Education Loans (FFEL) that were not owned by the federal government and have defaulted since March 13, 2020, will be assigned to the federal government, returned to good standing, and given the same relief as other government-owned loans. This webpage provides more information about student loan relief during COVID-19 and will be revised periodically as more information becomes available.


If you are having trouble paying your student loans due to financial hardship related to COVID-19, you have several options. These options depend in part on to whom you owe your debt. The federal government? A private lender? New York State? You can find answers for each of these scenarios here. If you aren’t sure who owns your loans, the FAQs below explain how to figure this out.

This page will be updated regularly to reflect any changes.

Federal Student Loans

What relief is the federal government providing for student loan borrowers?

Effective March 7, 2020, and originally provided by the CARES Act, the federal government provides the following relief to certain federal student loans through January 31, 2022 (see below for discussion of which loans):

  • suspension of payments (you will not be required to make payments)
  • stop to all interest accrual (effectively, your interest will be 0% for this period)
  • all months, even if no payment is made, will count toward loan forgiveness programs, like Public Service Loan Forgiveness, and loan rehabilitation (if you are not currently enrolled in any of these programs, consider calling your servicer to ask for more information)
  • no negative credit reporting for suspended payments (this relief won’t hurt your credit score)
  • end to debt collection activity, including wage garnishment (money that was recently taken will be returned)
  • any payments borrowers choose to pay will be applied to the loan account (if you choose to make payments, they will be used to pay down the balance of your loans)
    This relief, originally provided by the CARES Act and which has been extended several times, is automatic and does not require any action by the borrower.

Which loans receive this federal student loan relief?

The federal student loan relief applies to loans that are owned by the federal government only. This includes all Direct Loans and some Federal Family Education Loan Program (FFELP) loans. As of March 30, 2021, this also includes FFELP loans that were privately owned but have defaulted since March 13, 2020.

Privately-owned FFELP loans that are still in good standing or were in default prior to March 13, 2020, Perkins Loans, and private loans are not covered.

Call your loan servicer to confirm which of your loans are covered by this federal relief.

Federal student loan borrowers that do not receive this relief should ask their servicers what other relief options are available to them. These borrowers can find more information in the next section below, Private Student Loans.

All federal student loan borrowers should ask their loan servicer about income-driven repayments, which may result in lower monthly payments and build toward eventual loan forgiveness.

Private Student Loans

If you took out a loan from a bank or other private lender to pay for school or living expenses, or if your Federal Family Education Loan Program (FFELP) loan is owned by a private bank and has not defaulted since March 13, 2020, then the federal government’s CARES Act relief, described above, will not apply to those loans.

If you are unable to pay your private or privately-owned student loans due financial hardship related to COVID-19, you should call your loan servicer to ask what relief options are available for you. Before you call, take a moment to review some of the available options online. The DFS Step Up for Students section has information about your federal and private loans, and you can also find information about federal loans on the U.S. Department of Education’s StudentAid.gov website, including a login to access your federal loan accounts.

For the vast majority of borrowers, if you tell your servicer you need help, they will be able to offer some form of assistance. Borrowers with privately-owned federal student loan debt still have access to a variety of federal repayment and hardship options. Be sure to ask:

  • whether your loan is a federal or private student loan;
  • whether a deferment or forbearance is available, and the duration and implications of both these options;
  • whether there are any fees associated with the relief you are seeking and if those fees can be waived;
  • whether you will experience any negative credit reporting as the result of any relief you receive (the CARES Act prevents certain negative credit reporting)

You must call your servicer to get any relief for your private and privately-owned loans. Until your servicer knows you need help, they may not be able to give you relief. Remember, you may have loans with multiple servicers, so be sure to call all of your servicers so that you get relief for all your loans.  Keep records about any changes to your student loan account, including downloading and keeping payment records and correspondences with your servicer.

State Debt

For educational debt owed to the State, such as unpaid tuition, a grant that turned into a loan, or a loan you took out directly from the state, the State has temporarily suspended collection of those debts.  There is nothing you need to do to benefit from this extension.  The State will determine whether the suspension will be extended in 30-day increments.  This page will be updated with new information as it becomes available.

Timeline of Federal Relief

The federal government has taken several steps to assist federal student loan borrowers impacted by COVID-19, described above. The following is a review of the actions and announcement made by the White House and U.S. Department of Education.

  • On March 27, 2020, the federal government passed the CARES Act, which provided relief for most federal student loan borrowers, described below, effective March 7, 2020, through September 30, 2020.
  • On August 8, 2020, the White House issued an executive order instructing the U.S. Department of Education to extend relief through December 31, 2020.
  • On December 4, 2020, this relief was extended again, through January 31, 2021.
  • On January 20, 2021, the White House extended this relief through at least September 30, 2021.
  • On March 30, 2021, the U.S. Department of Education announced that it would extend this relief to Federal Family Education Loan Program borrowers whose loans were not owned by the federal government and who defaulted after March 13, 2020, effective through at least September 30, 2021. These defaulted loans will be assigned to the Department of Education, returned to good standing, and requests will be sent to the credit reporting agencies for any government-made negative credit reports from this period be corrected. Involuntary payments for these loans during this period will be returned automatically and borrowers may request that voluntary payments be returned.
  • On August 6, 2021, the White House announced a final extension of the student loan relief through January 31, 2022.

This section will be updated to reflect any additional updates or changes.

Important Tips

Deferments and income-driven repayment plans

  • If you lost your job or have lower income and are not able to make your full monthly payments, deferments and income-driven repayment plans are both ways to reduce or eliminate monthly payments. 
  • Deferments let you skip payments if you meet certain qualifications, but you will still have to repay that month’s amount later. 
  • Income-driven repayment plans set your payment amount based on your income, which in some cases can result in $0 monthly “payments.”  These repayment plans also lead toward loan forgiveness after a period of time, usually 20-25 years.  Public Service Loan Forgiveness only requires 10 years of payment, but be sure you are enrolled in the correct plan and meet all of the PSLF requirements.
  • Both require an application, and can cause interest to accrue, increasing the amount you owe overtime. You should review both options before speaking with you student loan servicer to determine which is best for you.
  • For many borrowers, income-driven repayment plans will be preferable to a deferment.

Forbearances

  • In general, deferments and income-driven repayment plans are better options than forbearances.  If your student loan servicer tells you to enter a forbearance, which are easy to apply for, be sure to ask them about these other options before agreeing.

Defaulted loans and rehabilitation

  • If your federal loans are in default, you should contact your student loan servicer to ask about rehabilitation, a process that can return your loans to good standing if you make 9 affordable and voluntary payments within 10 months. For loans covered by the CARES Act, discussed above, the suspended payments count toward repayment, so you should start the rehabilitation process soon. Rehabilitating your loans will also restore your repayment options, putting you in a better position for after the relief program ends.

Consolidating federal loans

  • If your student loan servicer suggests that you consolidate your loan, be aware that that process replaces your old loan with a new loan.  Any benefits or credits toward forgiveness, such as with the Public Service Loan Forgiveness program, will be lost.

Record keeping

  • Document everything and keep your records in one place.  If you speak to your student loan servicer on the phone and they make a change to your account, confirm that they will send a confirmation email or letter.  If you have any issues with you loans later, it will be helpful to have records of all of your interactions. 

Auto-payments

  • If your loan is covered by the CARES Act and you were enrolled in auto-payments, the federal government suspended those payments. When repayment begins, if you will not have enough money in your account to cover your monthly payment, be sure to turn off your auto-payments. Do not wait to do this—to ensure your request is processed before payments restart, if you plan to turn off your auto-payments you should do so immediately. When auto-payment is turned off you can still make manual payments.

FAQs

Do I need to do anything to continue receiving the CARES Act Relief for my federal student loans?

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For covered borrowers, there is no action that you need to take to receive relief described above. If you would like to receive credit during this time for Public Service Loan Forgiveness, Income-Drive Repayment loan cancellation, or loan Rehabilitation, be sure that you have the correct loan, are in a qualifying plan, and are otherwise eligible. Call your servicer to discuss. If you experience an issue with your servicer or believe your eligible loan is not receiving the correct relief, please file a complaint with the New York Department of Financial Services.

What should I do if I cannot afford my loans right now?

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If you have a federal loan that is covered by the CARES Act—discussed above—there is nothing that you have to do. The federal government will automatically suspend your payments and waive your interest. Any payments you do make will be applied to your loan. You should still read these FAQs to learn about additional programs that might assist with your loans.

For all other loans, you should call your loan servicer.

How do I know if my loans are federal or private?

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You can go to National Student Loan Data System (NSLDS) and log in to find a list of all of your federal loans: https://nslds.ed.gov/npas/index.htm. NSLDS will not list any of your private loans. You can also contact your loan servicer and ask which of your loans are private.

Are all repayment plans available for both my federal and private loans?

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No. Federally-offered repayment plans are only available for your federal loans, and only certain federal loans are eligible for some federally-offered plans. You should talk to your servicer to learn what, if any, plans, are available for your loans, as they will vary loan to loan.

How do I know if the CARES Act covers my federal loans?

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The extended CARES Act relief described above will cover your loans if you have a Direct Loan, a Family Federal Education Loan Program (FFELP) loan owned by the federal government, or a FFELP loan that was privately owned and which defaulted on or after March 13, 2020. You can also call your servicer to ask whether your loans are covered.

My loan previously was not covered by the CARES Act—is it now?

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On March 30, 2021, the U.S. Department of Education announced that it would extend the CARES Act coverage to include privately-owned FFELP loans that have defaulted since March 13, 2020. When those loans default, they are typically assigned to a Guaranty Agency that will attempt to resolve the default. Now, the Guaranty Agency will assign the loan the Department of Education, which will restore the loans to good standing and apply the CARES Act relief.

Any involuntary payments—garnishments or tax offsets—that were made on these loans since March 13, 2020, will be returned automatically. Any voluntary payments may be returned upon request.

This does not apply to any borrower who had a privately-owned FFELP loan and who paid the loan in full.

This new policy will take effect automatically, and no action is required by the borrower.

Do all federal loans qualify for all types of federal loan repayment plans or relief programs?

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No. There are a several kinds of federal loans, and not all of them qualify for all repayment options. You should speak with your servicer or visit the U.S. Department of Education website to learn which loans qualify for which programs: https://studentaid.gov/app/ibrInstructions.action.

Are income-driven repayment plans a good option for me?

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For federal student loan borrowers, income-driven repayment (IDR) plans lower your monthly payments to fit with your income. If you have lost your job or part of your income, your IDR payments could be as low as $0. Once you enroll in an IDR plan, you can keep your new monthly payment for a year, even if your income goes up. After a year, you will need to recertify with your current income, at which point your payment may change.

If your loan is covered by the CARES Act and extended relief, you can enroll in IDR and still have your monthly payments suspended for the remainder of the relief period.

I have seen news coverage about loan relief for federal loans, but I have private loans. Do I have options?

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Yes. See the section above called Private Student Loans to learn more about your relief options. If you have private loans and are worried about affording your monthly payments, you should call your servicer to explain your situation and to ask for assistance.

Is relief for my private loans automatic?

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No. If you need assistance with your private loans or any federal loans not covered by the CARES Act, you should call your student loan servicer.

If you are not sure what kind of loans you have, you should call your servicer to ask.

What should I say when I call my loan servicer for help?

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If you have been impacted by COVID-19 in any way and are worried about affording your payments, you should explain your circumstances and ask your servicer what options are available for you. When your servicer explains your options, be sure to ask whether interest will continue to accrue during any relief that you receive, whether you will have to repay any months for which you receive relief, when you will be expected to repay, and if there is flexibility to in how you repay. It’s important that you get the full scope of any relief that you are offered before you accept.

Will I need to document that I am having trouble paying?

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If your loan is covered by the federal CARES Act and extended relief, you will not need documentation and your relief will be automatic.

Some, but not all, private student loan servicers may ask you to provide documents that show you have lost your job or have reduced income. Every servicer will have different requirements, but some might ask for recent paystubs or a letter from your employer.

You should start collecting all documents related to your employment and any COVID-19 impact on your life in a single place. This will make it easier if a servicer asks you for documentation.

Should I use a deferment or forbearance instead of an income-driven repayment (IDR) plan?

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For most people struggling to pay their loans, IDR plans will be better than deferments and forbearances, which only allow you to stop making payments for short periods of time. In general, interest will continue to be charged during deferments and forbearances, which you will have to payback or which may be added to your principal balance, which is called “capitalization.”

However, under the CARES Act and the remainder of its extended relief, for eligible loans the federal government has effectively reduced monthly payments and interest to $0. This means that, if your loan is covered by the CARES Act and you enroll in IDR, your monthly payments will be $0 for this time period. Once repayments resume your monthly payments will be based on your income. For this reason, most borrowers will benefit from entering an IDR plan now. Call your servicer to discuss what options are best for you.

I am currently on an income-driven repayment (IDR) plan, but my income went down again. What should I do?

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You can recertify your income at any time, which will change your monthly payment. If you are already in an IDR but your income lowers, call your servicer or go online to change your monthly payments, which could go as low as $0 a month. Your lower payment will remain valid for one year, when you have to recertify. If your income goes back up during the year, you are not obligated to recertify until your one-year recertification date, and can keep your lower monthly payments.

Even if you will be covered by the extended CARE Acts relief, if you need to adjust your IDR payment you should do so soon. This will ensure that when your monthly payments start again the payment amount will be affordable.

What should I do if I am pursuing Public Service Loan Forgiveness (PSLF)?

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Only Direct Loans in qualifying income-driven repayment (IDR) plans are eligible for PSLF. All Direct Loans are covered by the federal CARES Act and extended relief, which reduces monthly payments, including interest, to $0. These $0 payments will count toward PSLF.

However, PSLF also requires employment with a qualified employer. If you lost your employment or had your hours reduced to less than 30 hours/week, then those months of unemployment or reduced hours may not be eligible for PSLF.

I have tried calling my servicer but I cannot reach a representative or their call center is closed. What should I do?

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Some servicers may have reduced staff because of COVID-19, causing increased wait times or difficult connecting with a representative. If you have access to the internet, you should go to your servicer’s website and look for instructions for how to do if you are impacted by COVID-19. If you are trying to enroll in an income-driven repayment (IDR) program, you can do that online through the U.S. Department of Education at https://studentaid.gov/app/ibrInstructions.action. You will need to create a Federal Student Aid (FSA) login if you have not done that already.

You can also file a complaint with the Department of Financial Services at www.dfs.ny.gov/complaint.

I can afford my loan payments right now. Should I still find a way to pay less or stop paying?

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If you can afford to pay your private loans, your best option is probably to continue making payments. Requesting a deferment or forbearance will pause your loan payment for several months, during which interest may continue to accrue. If you stop making payments under deferments or forbearances, it will take longer to repay your loan and you may pay more over time.

However, if you are a federal loan borrower, you may be able to lower your monthly payments by enrolling in an income-driven repayment (IDR) plan, even if you can afford your current payments. IDR plans also have the benefit of offering loan forgiveness after a certain period of repayment, however they may also have the effect of increasing the total amount you owe over time. Call your servicer to learn more about IDR plans.

If you are a federal borrower whose loan is covered by the extended CARES Act relief, your monthly payments (including interest) will be reduced to $0. If you choose to make any payments, then those payments will go directly to paying down your loan principal. It is up to you whether you want to make these payments.

I am a co-signer on a private loan and I am worried that I will have to make payments on the loan I co-signed, but I cannot afford that right now. What should I do?

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You should speak with the loan borrower that you co-signed for and get a better understanding of their ability to pay their own loans. In general, co-signers are not responsible for the loan as long as the primary borrower makes payments. Then, you should contact the loan servicer and ask about a “co-signer release.” Most private loan contracts allow for co-signors to be released from the loan after a certain period of on-time payments by the primary borrower. If you are eligible for a co-signor release, you should tell the servicer that you would like to be released. Even once you are released, you can still assist the primary borrower with payments, but you will be not contractually responsible for the loan if the borrower is unable to pay.