Federal Student Loan Debt Relief in the Context of COVID-19

Changes from August 24, 2020 to February 8, 2021

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

Federal Student Loan Debt Relief in the
~~August 24, 2020~~February 8, 2021
Context of COVID-19
Alexandra Hegji
The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of
Analyst in Social Policy Analyst in Social Policy
three federal student loan programs: the William D. Ford Federal Direct Loan (Direct Loan) 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, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan
program. As of program. As of ~~December 31, 2019, $1.5~~September 30, 2020, $1.6 trillion in trillion in ~~such loans~~loans from these programs, borrowed by or , borrowed by or on behalf of 42.on behalf of 42.8

9 million individuals, remained outstanding. In response to the current million individuals, remained outstanding. In response to the current ~~coronavirus disease~~Coronavirus Disease 2019 2019
(COVID-19) pandemic, numerous questions have arisen regarding student loan repayment flexibilities and debt relief that (COVID-19) pandemic, numerous questions have arisen regarding student loan repayment flexibilities and debt relief that
may be available to individuals to alleviate potential financial effects related to COVID-19. may be available to individuals to alleviate potential financial effects related to COVID-19.
The HEA authorizes several flexibilities that may be relevant to individuals facing financial difficulties resulting from The HEA authorizes several flexibilities that may be relevant to individuals facing financial difficulties resulting from
COVID-19. These include the following: COVID-19. These include the following:
 Loan deferment and forbearance options offer a borrower temporary relief from the obligation to make  Loan deferment and forbearance options offer a borrower temporary relief from the obligation to make
monthly payments. In certain instances, interest does not accrue during deferment periods; although interest monthly payments. In certain instances, interest does not accrue during deferment periods; although interest
does accrue during forbearance periods. Periods of deferment or forbearance do not count toward the 120 does accrue during forbearance periods. Periods of deferment or forbearance do not count toward the 120
monthly payments required to qualify for Public Service Loan Forgiveness (PSLF), nor do they count monthly payments required to qualify for Public Service Loan Forgiveness (PSLF), nor do they count
toward the 20- or 25-year repayment periods under the income-driven repayment plans. toward the 20- or 25-year repayment periods under the income-driven repayment plans.
 Income-driven repayment (IDR) plans afford borrowers the opportunity to make payments in amounts that  Income-driven repayment (IDR) plans afford borrowers the opportunity to make payments in amounts that
are capped at a specified share or proportion of their discretionary income over a repayment period not to are capped at a specified share or proportion of their discretionary income over a repayment period not to
exceed 20 or 25 years, depending on the plan. At the end of the repayment period, the remaining balance of exceed 20 or 25 years, depending on the plan. At the end of the repayment period, the remaining balance of
an individual’s loans is forgiven. an individual’s loans is forgiven.
Recent administrative and congressional actions, including the enactment of the Coronavirus Aid, Relief, and Economic Recent administrative and congressional actions, including the enactment of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act (P.L. 116-136), provide additional student loan relief measures: Security (CARES) Act (P.L. 116-136), provide additional student loan relief measures:
 The accrual of interest on  The accrual of interest on ~~federally~~Department of Education (ED) held student loans is suspended from March 13, held student loans is suspended from March 13, 2020,2020, through through
~~December 31, 2020.~~
~~ Federally~~ September 30, 2021.  ED-held student loans are being placed in a special administrative forbearance for March 13, 2020, held student loans are being placed in a special administrative forbearance for March 13, 2020,
~~through December 31, 2020.~~ through September 30, 2021. During this time, borrowers will not be required to make payments due on During this time, borrowers will not be required to make payments due on
their loans. This special administrative forbearance will count toward the 120 monthly payments required their loans. This special administrative forbearance will count toward the 120 monthly payments required
to qualify for PSLF, the 20- and 25-year repayment periods under the IDR plans, and the nine voluntary to qualify for PSLF, the 20- and 25-year repayment periods under the IDR plans, and the nine voluntary
payments required for individuals to rehabilitate their defaulted loans. payments required for individuals to rehabilitate their defaulted loans.
 Debt collections activities, including involuntary collection activities such as wage garnishment and offset  Debt collections activities, including involuntary collection activities such as wage garnishment and offset
of certain federal benefits (e.g., federal income tax return benefits, Social Security benefits) are of certain federal benefits (e.g., federal income tax return benefits, Social Security benefits) are ~~being~~
~~suspended on federally~~ suspended on ED-held student loans for March 13, 2020, through held student loans for March 13, 2020, through ~~December 31, 2020.~~
September 30, 2021.
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Federal Student Loan Debt Relief in the Context of COVID-19

Introduction
The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of
three federal student loan programs: the Wil iam D. Ford Federal Direct Loan (Direct Loan) three federal student loan programs: the Wil iam D. Ford Federal Direct Loan (Direct Loan)
program, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan program, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan
program.1 While new loans are program.1 While new loans are currently authorized to be made only through the Direct Loan program, authorized to be made only through the Direct Loan program,
previously made FFEL and Perkins Loan program loans remain outstanding and FFEL and Perkins Loan program loans remain outstanding and borrowers of such loans remain borrowers of such loans remain
responsible for repaying them.responsible for repaying them.
As of As of ~~December 31, 2019, $1.5~~September 30, 2020, approximately $1.6 tril ion in these loans, borrowed by or on behalf of tril ion in these loans, borrowed by or on behalf of 42.9~~42.8~~ mil ion mil ion
individuals, remained outstanding.2 individuals, remained outstanding.2
  Direct Loan program loans are owned by the U.S. Department of Education are owned by the U.S. Department of Education
(ED). As of (ED). As of ~~December 31, 2019~~September 30, 2020, approximately 35., approximately 35.39 mil ion borrowers owed mil ion borrowers owed
about $1.3 tril ion in Direct Loan debt.3 about $1.3 tril ion in Direct Loan debt.3
  FFEL program loans may be held by private lenders, guaranty agencies, or ED. may be held by private lenders, guaranty agencies, or ED.
As of As of ~~December 31, 2019~~September 30, 2020, approximately 11., approximately 11.80 mil ion borrowers owed about mil ion borrowers owed about
$$~~257.2~~245.9 bil ion in FFEL program debt. Of that, approximately $ bil ion in FFEL program debt. Of that, approximately $~~87.7~~86.1 bil ion was bil ion was
held by ED, representing between 3.held by ED, representing between 3.30 mil ion and mil ion and 65.8 mil ion borrowers,4 and mil ion borrowers,4 and
$$~~169.3~~159.8 bil ion was held by private lenders or guaranty agencies, representing bil ion was held by private lenders or guaranty agencies, representing
debt for between debt for between ~~6.0~~5.6 mil ion and mil ion and ~~7.2~~6.5 mil ion borrowers.5 mil ion borrowers.5
  Perkins Loan program loans may be held by institutions of higher education may be held by institutions of higher education
(IHEs) that made the loans or by ED. For award year 2018-2019 (July 1, 2018- (IHEs) that made the loans or by ED. For award year 2018-2019 (July 1, 2018-
June 30, 2019), approximately 2.0 mil ion borrowers owed June 30, 2019), approximately 2.0 mil ion borrowers owed ~~approximately~~about $5.7 $5.7
bil ionbil ion in Perkins Loans. Of that, ED held nearly $1 bil ionin Perkins Loans. Of that, ED held nearly $1 bil ion, representing debt representing debt
owed for
1 For additional information on loans made under these programs, see CRS Report R45931, 1 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 : Term s and Conditions for Borrowers; CRS Report ; CRS Report
RL31618, RL31618, Cam pus-Based Student Financial Aid Program s Under the Higher Education Act; and CRS Report R40122, ; and CRS Report R40122,
Federal Student Loans Made Under the Federal Fam ily Education Loan Program and the William D. Ford Federal
Direct Loan Program : Term s and Conditions for Borrowers (archived). (archived).
2 T his number represents an unduplicated number of federal student loan recipients. Some 2 T his number represents an unduplicated number of federal student loan recipients. Some individuals may have individuals may have
borrowed from more than one federal student loan program. As such, the numbers of recipients for the various federal borrowed from more than one federal student loan program. As such, the numbers of recipients for the various federal
student loan programs presented herein sum to greater than 42.student loan programs presented herein sum to greater than 42.89 million. million. U.S. Department of Education, Office of U.S. Department of Education, Office of
Federal Student Aid, Federal Student Aid Data Center, “ Federal Student Aid Portfolio Summary,” Federal Student Aid, Federal Student Aid Data Center, “ Federal Student Aid Portfolio Summary,”
https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls, (hereinafter, ED, “ Federal https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls, (hereinafter, ED, “ Federal
Student Aid Portfolio Summary”).Student Aid Portfolio Summary”).
3 ED, “Federal Student Aid Portfolio Summary.” 3 ED, “Federal Student Aid Portfolio Summary.”
4 Approximately 3.4 Approximately 3.170 million borrowers have FFEL program loans placed with ED-contracted loan servicers, and million borrowers have FFEL program loans placed with ED-contracted loan servicers, and
approximately 2.approximately 2.98 million borrowers have FFEL million borrowers have FFEL ~~pro gram~~program loans placed with the ED loans placed with the ED -contracted Default Management -contracted Default Management
System. An individual may have FFEL program loans placed with both ED-contracted loan servicers and the Default System. An individual may have FFEL program loans placed with both ED-contracted loan servicers and the Default
Management System; thus, the unduplicated count of FFEL program borrowers with loans held by ED is unknown.Management System; thus, the unduplicated count of FFEL program borrowers with loans held by ED is unknown.
U.S. Department of Education, Office of Federal Student Aid, Federal StudentU.S. Department of Education, Office of Federal Student Aid, Federal Student Aid Data Center, “Aid Data Center, “ Location of Federal Location of Federal
Family Education Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/Family Education Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/
LocationofFFELPLoans.xls. LocationofFFELPLoans.xls.
5 Approximately 5 Approximately 65.4 million borrowers have FFEL program loans held by commercial lenders, and approximately 1. million borrowers have FFEL program loans held by commercial lenders, and approximately 1.21
million borrowers have FFEL program loans held by guaranty agencies. An individual borrower may have FFEL million borrowers have FFEL program loans held by guaranty agencies. An individual borrower may have FFEL
program loans held by a commercial lender and a guaranty agencyprogram loans held by a commercial lender and a guaranty agency ; thus, the unduplicated count of FFEL program ; thus, the unduplicated count of FFEL program
borrowers with loans that are not held by ED is unknownborrowers with loans that are not held by ED is unknown . U.S. Department of Education, Office of Federal Student . U.S. Department of Education, Office of Federal Student
Aid, Federal Student Aid Data Center, “Location of Federal Family Education Loan Program Loans,”Aid, Federal Student Aid Data Center, “Location of Federal Family Education Loan Program Loans,”
https://studentaid.gov/sites/default/files/fsawg/datacenter/library/https://studentaid.gov/sites/default/files/fsawg/datacenter/library/~~LocationofFFELPLoans~~LocationofFFELP Loans.xls. .xls.
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Federal Student Loan Debt Relief in the Context of COVID-19

~~owed for~~ approximately 375,000 borrowers, and IHEs held about $4.7 bil ion, approximately 375,000 borrowers, and IHEs held about $4.7 bil ion,
representing debt for approximately 1.6 mil ion borrowers.6 representing debt for approximately 1.6 mil ion borrowers.6
In response to the current In response to the current ~~coronavirus disease~~Coronavirus Disease 2019 (COVID-19) pandemic, numerous questions 2019 (COVID-19) pandemic, numerous questions
have arisen regarding student loan repayment flexibilities and debt relief that may be available to have arisen regarding student loan repayment flexibilities and debt relief that may be available to
individuals to al eviate potential financial effects related to COVID-19. The HEA general y individuals to al eviate potential financial effects related to COVID-19. The HEA general y
authorizes several options for qualifying individuals. Recent administrative and congressional authorizes several options for qualifying individuals. Recent administrative and congressional
action, including the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) action, including the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES)
Act (P.L. 116-136), provide additional student loan relief measures. Act (P.L. 116-136), provide additional student loan relief measures.
This report provides an overview of student loan repayment flexibilities and debt relief provisions This report provides an overview of student loan repayment flexibilities and debt relief provisions
that may be available to borrowers facing financial difficulties resulting from the pandemic. It that may be available to borrowers facing financial difficulties resulting from the pandemic. It
first lists some pre-existing loan terms and conditions (authorized through statute and regulations) first lists some pre-existing loan terms and conditions (authorized through statute and regulations)
that may be available to individuals. It then discusses specific administrative and congressional that may be available to individuals. It then discusses specific administrative and congressional
actions taken to address student loan debt in the context of COVID-19. The report concludes with actions taken to address student loan debt in the context of COVID-19. The report concludes with
a brief description of additional existing authorities that could be utilized to address other aspects a brief description of additional existing authorities that could be utilized to address other aspects
of student loan relief. of student loan relief.
Pre-existing Loan Terms and Conditions
Several loan terms and conditions that offer forms of repayment relief to borrowers were Several loan terms and conditions that offer forms of repayment relief to borrowers were
authorized in statute and regulations prior to the onset of the COVID-19 pandemic. These include authorized in statute and regulations prior to the onset of the COVID-19 pandemic. These include
periods of deferment and forbearance, which offer borrowers temporary relief from the obligation periods of deferment and forbearance, which offer borrowers temporary relief from the obligation
to make monthly payments; and the availability of income-driven repayment (IDR) plans (e.g., to make monthly payments; and the availability of income-driven repayment (IDR) plans (e.g.,
income-based repayment, Pay As You Earn [PAYE]), which afford borrowers the opportunity to income-based repayment, Pay As You Earn [PAYE]), which afford borrowers the opportunity to
make payments in amounts that are capped at a specified share or proportion of their make payments in amounts that are capped at a specified share or proportion of their
discretionary income, for a maximum repayment period of 20 or 25 years. discretionary income, for a maximum repayment period of 20 or 25 years.
Deferment
A A deferment is a temporary period during which a borrower’s obligation to make regular monthly is a temporary period during which a borrower’s obligation to make regular monthly
payments of principal or interest is suspended, and during which an interest subsidy (i.e., interest payments of principal or interest is suspended, and during which an interest subsidy (i.e., interest
does not accrue) may be provided on certain types of loans. Where an interest subsidy is not does not accrue) may be provided on certain types of loans. Where an interest subsidy is not
provided, unpaid interest that has accrued on a borrower’s loan during a deferment is capitalized provided, unpaid interest that has accrued on a borrower’s loan during a deferment is capitalized
(i.e., added to the principal) at the expiration(i.e., added to the principal) at the expiration of the deferment period. Periods of deferment do not of the deferment period. Periods of deferment do not
count toward the 120 monthly payments required to qualify for Public Service Loan Forgiveness count toward the 120 monthly payments required to qualify for Public Service Loan Forgiveness
(PSLF),7 and most are not included in a borrower’s repayment period (e.g., periods of (PSLF),7 and most are not included in a borrower’s repayment period (e.g., periods of
unemployment deferment do not count toward the maximum repayment periods of 20 or 25 years unemployment deferment do not count toward the maximum repayment periods of 20 or 25 years
under the IDR plans). In most instances, a borrower must proactively apply for and request a under the IDR plans). In most instances, a borrower must proactively apply for and request a
deferment. deferment.
A deferment may be granted for a variety of reasons. Unemployment deferment and economic A deferment may be granted for a variety of reasons. Unemployment deferment and economic
hardship deferment (described below) may be especial y relevant to individuals facing financial hardship deferment (described below) may be especial y relevant to individuals facing financial
difficulties due to COVID-19. These types of deferment are available to borrowers of loans made difficulties due to COVID-19. These types of deferment are available to borrowers of loans made
under the Direct Loan, FFEL, and Perkins Loan programs. under the Direct Loan, FFEL, and Perkins Loan programs.

6 CRS communication with U.S. Department of Education, Office of Legislative and Congressional Affairs, May 22, 6 CRS communication with U.S. Department of Education, Office of Legislative and Congressional Affairs, May 22,
2020. 2020.
7 For additional information on PSLF, see CRS Report R45389, 7 For additional information on PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program:
Selected Issues. .
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Unemployment Deferment
A borrower who is seeking to obtain full-time employment and is either not employed or A borrower who is seeking to obtain full-time employment and is either not employed or
employed less than full-time may be granted an employed less than full-time may be granted an unemployment deferment.8 To be eligible, a .8 To be eligible, a
borrower must either be receiving unemployment benefits or document that he or she has borrower must either be receiving unemployment benefits or document that he or she has
registered with a public or private employment agency (if one is available within 50 miles) and is registered with a public or private employment agency (if one is available within 50 miles) and is
diligently seeking to obtain full-time employment. diligently seeking to obtain full-time employment.
The deferment may be granted for an initial six-month period, and may be extended in six-month The deferment may be granted for an initial six-month period, and may be extended in six-month
increments.9 A borrower may receive the deferment for a maximum cumulative period of three increments.9 A borrower may receive the deferment for a maximum cumulative period of three
years, which may include one or more episodes of unemployment.10 years, which may include one or more episodes of unemployment.10
During an unemployment deferment, an interest subsidy is provided on Direct Subsidized Loans, During an unemployment deferment, an interest subsidy is provided on Direct Subsidized Loans,
the subsidized component of Direct Consolidation Loans, FFEL Stafford (Subsidized) Loans, the the subsidized component of Direct Consolidation Loans, FFEL Stafford (Subsidized) Loans, the
subsidized component of FFEL Consolidation Loans, and Perkins Loans. subsidized component of FFEL Consolidation Loans, and Perkins Loans.
Economic Hardship Deferment
A borrower may qualify for a deferment during periods while he or she is experiencing an A borrower may qualify for a deferment during periods while he or she is experiencing an
economic hardship.11 To qualify, a borrower must be (1) receiving payments under a federal or economic hardship.11 To qualify, a borrower must be (1) receiving payments under a federal or
state public assistance program (e.g., Temporary Assistance for Needy Families [TANF], state public assistance program (e.g., Temporary Assistance for Needy Families [TANF],
Supplemental Security Income [SSI], Supplemental Nutrition Assistance Program [SNAP], state Supplemental Security Income [SSI], Supplemental Nutrition Assistance Program [SNAP], state
general public assistance, other means-tested benefits), or (2) working full-time and have a general public assistance, other means-tested benefits), or (2) working full-time and have a
monthly income that does not exceed an amount equal to 150% of the poverty line applicable to monthly income that does not exceed an amount equal to 150% of the poverty line applicable to
the borrower’s family size, as calculated on a monthly basis.12 the borrower’s family size, as calculated on a monthly basis.12
The deferment may be granted for periods of up to one year at a time, and may be extended up to The deferment may be granted for periods of up to one year at a time, and may be extended up to
a cumulative maximum of three years.13 Periods of up to three years while a borrower qualifies a cumulative maximum of three years.13 Periods of up to three years while a borrower qualifies
for an economic hardship deferment may be counted as part of the repayment period for eac h of for an economic hardship deferment may be counted as part of the repayment period for eac h of
the IDR plans. the IDR plans.
During an economic hardship deferment, an interest subsidy is provided on Direct Subsidized During an economic hardship deferment, an interest subsidy is provided on Direct Subsidized
Loans, the subsidized component of Direct Consolidation Loans, FFEL Stafford Loans, the Loans, the subsidized component of Direct Consolidation Loans, FFEL Stafford Loans, the
subsidized component of FFEL Consolidation Loans, and Perkins Loans. subsidized component of FFEL Consolidation Loans, and Perkins Loans.

8 34 C.F.R. §§674.34(d), 682.210(h) and (s)(5), 685.204(f); U.S. Department of Education, Office of Federal Student 8 34 C.F.R. §§674.34(d), 682.210(h) and (s)(5), 685.204(f); U.S. Department of Education, Office of Federal Student
Aid, “ Unemployment Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/Aid, “ Unemployment Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/
downloadForm.action?searchT ype=library&shortName=unemploy&localeCode=en-us&_ga=downloadForm.action?searchT ype=library&shortName=unemploy&localeCode=en-us&_ga=
2.212772371.684834368.1556119313 -753213604.1539381477. 2.212772371.684834368.1556119313 -753213604.1539381477.
9 For Perkins Loan program loans, IHEs must reaffirm continued deferment eligibility on at least an annual basis; 34 9 For Perkins Loan program loans, IHEs must reaffirm continued deferment eligibility on at least an annual basis; 34
C.F.R. §674.38(d). C.F.R. §674.38(d).
10 After a period of unemployment deferment, a Perkins Loan borrower is entitled to a post -deferment grace period of 10 After a period of unemployment deferment, a Perkins Loan borrower is entitled to a post -deferment grace period of
six consecutive months; 34 C.F.R. §674.34(k). six consecutive months; 34 C.F.R. §674.34(k).
11 34 C.F.R. §§674.34(e), 682.210(s)(6), 685.204(g); U.S. Department of Education, Office of Federal Student Aid, 11 34 C.F.R. §§674.34(e), 682.210(s)(6), 685.204(g); U.S. Department of Education, Office of Federal Student Aid,
“Economic Hardship Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/ “Economic Hardship Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/
downloadForm.action?searchT ype=library&shortName=ecohardshp&localeCode=en-us&_ga=downloadForm.action?searchT ype=library&shortName=ecohardshp&localeCode=en-us&_ga=
2.9995570.684834368.1556119313-753213604.1539381477. 2.9995570.684834368.1556119313-753213604.1539381477.
12 A borrower may also qualify for an economic hardship deferment if he or she is serving as a volunteer in the Peace 12 A borrower may also qualify for an economic hardship deferment if he or she is serving as a volunteer in the Peace
Corps. Corps.
13 After a period of economic hardship deferment, a Perkins Loan borrower is entitled to a post -deferment grace period 13 After a period of economic hardship deferment, a Perkins Loan borrower is entitled to a post -deferment grace period
of six consecutive months; 34 C.F.R. §674.34(k). of six consecutive months; 34 C.F.R. §674.34(k).
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Federal Student Loan Debt Relief in the Context of COVID-19

Forbearance
Forbearance constitutes permission for a borrower to temporarily cease making monthly constitutes permission for a borrower to temporarily cease making monthly
payments, to make payments in reduced amounts, or to make payments over an extended period payments, to make payments in reduced amounts, or to make payments over an extended period
of time. During periods of forbearance, no interest subsidies are provided (i.e., interest continues of time. During periods of forbearance, no interest subsidies are provided (i.e., interest continues
to accrue) and borrowers ultimately remain responsible for paying al of the interest that accrues to accrue) and borrowers ultimately remain responsible for paying al of the interest that accrues
on their loans. Borrowers may pay the interest as it accrues during forbearance. At the end of the on their loans. Borrowers may pay the interest as it accrues during forbearance. At the end of the
forbearance period, any unpaid accrued interest is capitalized into the principalforbearance period, any unpaid accrued interest is capitalized into the principal balance of Direct balance of Direct
Loan program and FFEL program loans; it is not capitalized (but remains due) for Perkins Loan Loan program and FFEL program loans; it is not capitalized (but remains due) for Perkins Loan
program loans.14 Periods of forbearance do not count toward the 120 monthly payments required program loans.14 Periods of forbearance do not count toward the 120 monthly payments required
to qualify for PSLF,15 and are not included in a borrower’s repayment period (e.g., periods of to qualify for PSLF,15 and are not included in a borrower’s repayment period (e.g., periods of
student loan debt burden forbearance do not count toward the maximum repayment periods of 20 student loan debt burden forbearance do not count toward the maximum repayment periods of 20
or 25 years under the IDR plans). General y, borrowers must apply for forbearance. or 25 years under the IDR plans). General y, borrowers must apply for forbearance.
General forbearance and student loan debt burden forbearance (described below) may be General forbearance and student loan debt burden forbearance (described below) may be
especial y relevant to individuals facing financial difficulties due to COVID-19. These types of especial y relevant to individuals facing financial difficulties due to COVID-19. These types of
forbearance are available to borrowers of loans made under the Direct Loan, FFEL, and Perkins forbearance are available to borrowers of loans made under the Direct Loan, FFEL, and Perkins
Loan programs. Loan programs.
General Forbearance
A borrower may request a general forbearance (sometimes referred to as a discretionary A borrower may request a general forbearance (sometimes referred to as a discretionary
forbearance) on the basis of experiencing a temporary hardship due to financial difficulties, a forbearance) on the basis of experiencing a temporary hardship due to financial difficulties, a
change in employment, medical expenses, or other reasons.16 change in employment, medical expenses, or other reasons.16
General forbearance may be granted for an initial period of up to 12 months, renewed upon the General forbearance may be granted for an initial period of up to 12 months, renewed upon the
borrower’s request, and limited to a maximum of 36 months.17 At the end of the forbearance borrower’s request, and limited to a maximum of 36 months.17 At the end of the forbearance
period, any unpaid interest that accruedperiod, any unpaid interest that accrued on Direct Loan and FFEL program loans during the ~~during the~~ period is capitalized. period is capitalized.
Student Loan Debt Burden Forbearance
A borrower may receive a forbearance on the basis of having a federal student loan debt burden A borrower may receive a forbearance on the basis of having a federal student loan debt burden
that equals or exceeds 20% of his or her total monthly taxable income.18 To qualify, a borrower that equals or exceeds 20% of his or her total monthly taxable income.18 To qualify, a borrower
must demonstrate that his or her required monthly payments on HEA Title IV federal student must demonstrate that his or her required monthly payments on HEA Title IV federal student
~~loans (e.g., loans made under the Direct Loan, FFEL, or Perkins Loan programs) equal or exceed~~
~~that amount.~~

14 34 C.F.R. §§674.33(d), 382.211(a)(4), 385.205(a). 14 34 C.F.R. §§674.33(d), 382.211(a)(4), 385.205(a).
15 For additional information on PSLF, see CRS Report R45389, 15 For additional information on PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program:
Selected Issues. .
16 34 C.F.R. §§674.33(d)(f)(ii), 682.211(a)(2)(i), 685.205(a)(1); U.S. Department of Education, “General Forbearance 16 34 C.F.R. §§674.33(d)(f)(ii), 682.211(a)(2)(i), 685.205(a)(1); U.S. Department of Education, “General Forbearance
Request,” OMB No. 1845-0031, https://studentloans.gov/myDirectLoan/downloadForm.action?searchType=library&Request,” OMB No. 1845-0031, https://studentloans.gov/myDirectLoan/downloadForm.action?searchType=library&
shortName=general&localeCode=en-us&_ga=2.218639505.986094327.1560875974 -753213604.1539381477. shortName=general&localeCode=en-us&_ga=2.218639505.986094327.1560875974 -753213604.1539381477.
17 U.S. Department of Education, “General Forbearance Request,” OMB No. 1845-0031, https://studentloans.gov/17 U.S. Department of Education, “General Forbearance Request,” OMB No. 1845-0031, https://studentloans.gov/
myDirectLoan/downloadForm.action?searchType=library&shortName=general&localeCode=en-us&_ga=myDirectLoan/downloadForm.action?searchType=library&shortName=general&localeCode=en-us&_ga=
2.218639505.986094327.1560875974 -753213604.1539381477; U.S. Department of Education, Office of Federal 2.218639505.986094327.1560875974 -753213604.1539381477; U.S. Department of Education, Office of Federal
Student Aid, “Student Loan Forbearance,” https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/Student Aid, “Student Loan Forbearance,” https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/
forbearance (accessed March 31, 2020). forbearance (accessed March 31, 2020).
18 34 C.F.R. §674.33(d)(5)(i), 682.211(h)(2)(i)(B), 685.205(a)(6); U.S. Department of Education, Mandatory 18 34 C.F.R. §674.33(d)(5)(i), 682.211(h)(2)(i)(B), 685.205(a)(6); U.S. Department of Education, Mandatory
Forbearance Request, “ Student Loan Debt Burden,” OMB No. 1845-0018, https://studentloans.gov/myDirectLoan/Forbearance Request, “ Student Loan Debt Burden,” OMB No. 1845-0018, https://studentloans.gov/myDirectLoan/
downloadForm.action?searchT ype=library&shortName=student&localeCode=en-us&_ga=downloadForm.action?searchT ype=library&shortName=student&localeCode=en-us&_ga=
2.148341183.986094327.1560875974 -753213604.1539381477. 2.148341183.986094327.1560875974 -753213604.1539381477.
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loans (e.g., loans made under the Direct Loan, FFEL, or Perkins Loan programs) equal or exceed that amount. Student loan debt burden forbearance may be granted for an initial period of up to 12 months, Student loan debt burden forbearance may be granted for an initial period of up to 12 months,
may be renewed upon the borrower’s request, and is limited to a maximum of 36 months. may be renewed upon the borrower’s request, and is limited to a maximum of 36 months.
Income-Driven Repayment Plans
IDR plans19 afford borrowers the opportunity to make payments in amounts that are capped at a IDR plans19 afford borrowers the opportunity to make payments in amounts that are capped at a
specified share or proportion of their specified share or proportion of their discretionary income20 over a repayment period not to 20 over a repayment period not to
exceed 20 to 25 years, depending on the plan. At the end of the repayment period, the remaining exceed 20 to 25 years, depending on the plan. At the end of the repayment period, the remaining
balance of an individual’s loans is forgiven. Under these plans, it is possible for a borrower’s balance of an individual’s loans is forgiven. Under these plans, it is possible for a borrower’s
monthly payment to equal $0. monthly payment to equal $0.
There are several IDR plans currently available to borrowers: the Income-Contingent Repayment There are several IDR plans currently available to borrowers: the Income-Contingent Repayment
(ICR) plan, the Income-Based Repayment (IBR) plans (one version of which is available to (ICR) plan, the Income-Based Repayment (IBR) plans (one version of which is available to
individuals who qualify as a new borrower on or after July 1, 2014; and another which is individuals who qualify as a new borrower on or after July 1, 2014; and another which is
available to individuals who do not qualify as a new borrower as of that date), the Pay As You available to individuals who do not qualify as a new borrower as of that date), the Pay As You
Earn (PAYE) repayment plan, and the Revised Pay As You Earn (REPAYE) repayment plan. In Earn (PAYE) repayment plan, and the Revised Pay As You Earn (REPAYE) repayment plan. In
general, Direct Loan borrowers (other than Parent PLUS Loan borrowers) are eligible for any of general, Direct Loan borrowers (other than Parent PLUS Loan borrowers) are eligible for any of
these plans.21 FFEL program borrowers (other than Parent PLUS loan borrowers) are only eligible these plans.21 FFEL program borrowers (other than Parent PLUS loan borrowers) are only eligible
for the IBR plans.22 Perkins Loan borrowers are not eligible for any IDR plan. for the IBR plans.22 Perkins Loan borrowers are not eligible for any IDR plan.
Individuals must apply to repay their loans according to an IDR plan.23 In addition, they must Individuals must apply to repay their loans according to an IDR plan.23 In addition, they must
annual y provide documentation of their income and family size to remain eligible for IDR annual y provide documentation of their income and family size to remain eligible for IDR
repayment.24 Borrowers may update their income and family size at any time if either changes. repayment.24 Borrowers may update their income and family size at any time if either changes.
Upon submission of such information, a borrower’s monthly payment amount wil be Upon submission of such information, a borrower’s monthly payment amount wil be
recalculated accordingly. recalculated accordingly.
Administrative and Congressional Actions Taken in
Response to COVID-19
~~Recently,~~ ED and Congress have taken steps to provide additional forms of relief to federal ED and Congress have taken steps to provide additional forms of relief to federal
student loan student loan ~~borrowers~~borrowers in response to COVID-19. These include cancel ing Direct Loans for payment periods during which . These include cancel ing Direct Loans for payment periods during which
qualifying individuals withdrew from their course of study due to COVID-19, waiving Direct qualifying individuals withdrew from their course of study due to COVID-19, waiving Direct
Subsidized Loan limitationsSubsidized Loan limitations for students affected by COVID-19, temporarily for students affected by COVID-19, temporarily ~~suspending interest~~
~~accrual on qualifying loans, expanding the instances under which a forbearance may be available~~

19 For additional information on the IDR plans, see U.S. Department of Education, Office of Federal Student Aid, 19 For additional information on the IDR plans, see U.S. Department of Education, Office of Federal Student Aid,
“Income-Driven Repayment Plans, https://studentaid.gov/manage-loans/repayment/plans/income-driven (accessed “Income-Driven Repayment Plans, https://studentaid.gov/manage-loans/repayment/plans/income-driven (accessed
March 31, 2020) and CRS Report R45931, March 31, 2020) and CRS Report R45931, Federal Student Loans Made Through the William D. Ford Federal Direct
Loan Program : Term s and Conditions for Borrowers. .
20 Discretionary income is defined as the portion of a borrower’s adjusted gross income that is in excess of a specified 20 Discretionary income is defined as the portion of a borrower’s adjusted gross income that is in excess of a specified
multiple of the federal poverty guidelines applicable to the borrower’s family size. multiple of the federal poverty guidelines applicable to the borrower’s family size.
21 34 C.F.R. §685.208. 21 34 C.F.R. §685.208.
22 34 C.F.R. §682.215. 22 34 C.F.R. §682.215.
23 U.S. Department of Education, “Income-Driven Repayment (IDR) Plan Request,” OMB No. 1845-0102, 23 U.S. Department of Education, “Income-Driven Repayment (IDR) Plan Request,” OMB No. 1845-0102,
https://studentaid.gov/app/images/idrPreview.pdf. https://studentaid.gov/app/images/idrPreview.pdf.
24 On December 19, 2019, the Fostering Undergraduate T alent by Unlocking Resources for Education Act (the 24 On December 19, 2019, the Fostering Undergraduate T alent by Unlocking Resources for Education Act (the
FUT URE Act; P.L. 116-91) was enacted. Among other provisions, P.L. 116-91 authorizes the Internal Revenue Service FUT URE Act; P.L. 116-91) was enacted. Among other provisions, P.L. 116-91 authorizes the Internal Revenue Service
to share relevant tax return information with ED for the purpose of determining a Direct Loan borrower ’s eligibility for to share relevant tax return information with ED for the purpose of determining a Direct Loan borrower ’s eligibility for
and repayment obligations under IDR plans. As of the publication date of this report, it appears these procedures have and repayment obligations under IDR plans. As of the publication date of this report, it appears these procedures have
not yet been operationalized. not yet been operationalized.
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suspending interest accrual on qualifying loans, expanding the instances under which a forbearance may be available to borrowers of qualifying loans, and temporarily ceasing to borrowers of qualifying loans, and temporarily ceasing col ections on qualifying defaulted col ections on qualifying defaulted
loans. loans.
Returning Direct Loans
Under the HEA, a Direct Loan borrower may be required to return or repay al or part of the Under the HEA, a Direct Loan borrower may be required to return or repay al or part of the
Direct Loans borrowed if the student does not complete a payment or enrollment period at an IHE 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 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 he or she depending on whether a student did not begin attendance at an IHE or whether he or she
withdrew. withdrew.
Failure to Begin Attendance
If a student does not begin attendance at an IHE in a payment If a student does not begin attendance at an IHE in a payment ~~or enrollment period,~~ period25 or period of enrollment,26 Title IV funds Title IV funds
(including Direct Loan funds) must be returned to ED by the IHE and/or the (including Direct Loan funds) must be returned to ED by the IHE and/or the student according the student according the
regulatory provisions.regulatory provisions.2527 For Direct Loan amounts required to be returned by the student, the IHE 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 that the student wil must immediately notify ED (or its loan servicers) when it becomes aware that the student wil
not begin or has not begun attendance. Loan servicers then issue a final demand letter to the 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 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.interest within 30 days from the date the letter is mailed.2628 If the borrower If the borrower fails to comply with the fails to comply with the
demand letter, he or she is considered in default on the loan. demand letter, he or she is considered in default on the loan.
~~In March 2020, ED issued guidance27 to IHEs specifying some flexibilities that may be used to~~
~~address the return of Direct Loans by recipients who did not begin attendance at an IHE due to~~
~~COVID-19. ED stated that if a student was unable to begin attendance due to a COVID-19-~~
~~related school closure, the IHE is not required to notify the loan servicer of the student’s failure to~~
~~begin~~ED has waived the requirement that IHEs notify loan servicers if a student wil not or has not begun attendance. By waiving this requirement, loan servicers would not issue demand letters, attendance. By waiving this requirement, loan servicers would not issue demand letters, and and
borrowers would be able to repay any loans according to the terms of the promissory note, borrowers would be 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. including receiving a six-month grace period prior to the start of repayment.
This waiver expires at the end of the IHE’s “payment period that begins after the date on which the Federal y-declared national emergency related to COVID-19 is rescinded.”29 Withdrawal
HEA Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the 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 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 (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 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, he or she repays it in accordance~~
~~with the terms of the loan.28~~
~~The CARES Act authorizes several waivers with respect to Return of Title IV Aid procedures.~~
~~Specific to Direct Loan borrowers, the act requires ED to cancel a borrower’s obligation to repay~~

~~25 34 C.F.R. §668.21.~~
~~26 34 C.F.R. §685.211(e)(2).~~
~~27 U.S. Department of Education, Office of Postsecondary Education, “ Guidance for interruptions of study related to~~
~~Coronavirus (COVID-19),” electronic announcement, March 5, 2020 (updated June 16, 2020), https://ifap.ed.gov/~~
~~electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19 .~~
~~28 34 C.F.R. §668.22(h)(3)(i).~~
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25 A payment period is the period for which a T itle 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. 26 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). 27 34 C.F.R. §668.21. 28 34 C.F.R. §685.211(e)(2). 29 Department of Education, “Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkin s 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). Congressional Research Service 6 Federal Student Loan Debt Relief in the Context of COVID-19 aid recipient is required to return any portion of a Direct Loan, he or she repays it in accordance with the terms of the loan.30 The CARES Act authorizes several waivers with respect to Return of Title IV Aid procedures. Specific to Direct Loan borrowers, the act requires 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 the entire portion of a Direct Loan associated with a payment period during which the student
withdraws from an IHE as a result of a withdraws from an IHE as a result of a qualifying emergency..2931
Direct Subsidized Loan Limitations
Since July 1, 2013, a student who is a Since July 1, 2013, a student who is a first-time borrower3032 may only borrow Direct Subsidized may only borrow Direct Subsidized
Loans for a period that may not exceed 150% of the published length of the academic program in Loans for a period that may not exceed 150% of the published length of the academic program in
which he or she is currently enrolled (e.g., six years for enrollment in a four-year bachelor’s which he or she is currently enrolled (e.g., six years for enrollment in a four-year bachelor’s
degree program). This is referred to as the Direct Subsidized Loan maximum eligibility period. degree program). This is referred to as the Direct Subsidized Loan maximum eligibility period.3133
If a Direct Subsidized Loan borrower subject to this provision remains enrolled beyond the If a Direct Subsidized Loan borrower subject to this provision remains enrolled beyond the
applicable maximum eligibility period, he or she wil lose the interest subsidy and wil become applicable maximum eligibility period, he or she wil lose the interest subsidy and wil become
responsible for paying the interest that accrues on his or her Direct Subsidized Loans after the responsible for paying the interest that accrues on his or her Direct Subsidized Loans after the
date that the maximum eligibility period is exceeded. date that the maximum eligibility period is exceeded.
The CARES Act specifies that ED shal exclude from the maximum eligibility period any The CARES Act specifies that ED shal exclude from the maximum eligibility period any
semester (or equivalent) that the student does not complete due to a qualifying emergency, if ED semester (or equivalent) that the student does not complete due to a qualifying emergency, if ED
is “able to administer such policy in a manner that limits complexity and the burden on the is “able to administer such policy in a manner that limits complexity and the burden on the
student.” student.”3234
Entering Repayment
In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are required to 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 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, Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans,
and Perkins Loans begins after a grace period.and Perkins Loans begins after a grace period.3335 The grace period begins after the borrower ceases 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 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 least a half-time basis is often referred to as in-school status for federal student loan purposes). for federal student loan purposes).
The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent 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 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~~
~~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.34 A borrower qualifies for such an in-school~~

29 30 34 C.F.R. §668.22(h)(3)(i). 31 T he CARES Act defines a qualifying emergency as (1) “a public health emergency related to the coronavirus T he 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) 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 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) “or 501, respectively, of the Robert T . Stafford Disaster Relief and Emergency Assistance Act”; or (3) “ a national a national
emergency related to the coronavirus declared by the President under section 201 of the National Emergencies Act.”emergency related to the coronavirus declared by the President under section 201 of the National Emergencies Act.”
30 32 A first-time borrower means “an individual who has no outstanding balance of principal or interest on a Direct Loan A first-time borrower means “an individual who has no outstanding balance of principal or interest on a Direct Loan
Program or FFEL Program loan on July 1, 2013, or on the date the borrower obtains a Direct Loan Program loan after Program or FFEL Program loan on July 1, 2013, or on the date the borrower obtains a Direct Loan Program loan after
July 1, 2013”; 34 C.F.R. §685.200(f)(1)(i). July 1, 2013”; 34 C.F.R. §685.200(f)(1)(i).
3133 HEA §455(q); 34 C.F.R. §685.200(f). HEA §455(q); 34 C.F.R. §685.200(f).
~~32 P.L. 116-136, §3506.~~
33T he FAFSA Simplification Act (Division FF, T itle VII of the Consolidated Appropriations Act, 2021 (P.L. 116-260)) repealed the Direct Subsidized Loan maximum eligibility period. T he FAFSA Act is generally effective July 1, 2023; however, it permits the Secretary of Education to implement the repeal prior to July 1, 2023. T he repeal has not yet been implemented. 34 P.L. 116-136, §3506. 35 34 C.F.R. §§674.31, 682.209, 685.207. For Direct Loan program and FFEL program loans, the 34 C.F.R. §§674.31, 682.209, 685.207. For Direct Loan program and FFEL program loans, the grace period typically grace period typically
lasts six months. For Perkins Loan program loans, the grace period typically lasts nine months.lasts six months. For Perkins Loan program loans, the grace period typically lasts nine months.
~~34 34 C.F.R. §§674.33, 682.210, 685.204(b).~~
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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 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.36 A borrower qualifies for such an in-school deferment if he or she, or the student on whose behalf a PLUS Loan is made, is enrolled on at deferment if he or she, or the student on whose behalf a PLUS Loan is made, is enrolled on at
least a half-time basis. least a half-time basis.
ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans
whose loan status was whose loan status was in-school on the date the student’s on the date the student’s “attendance at attendance at ~~an IHE~~the institution was interrupted was interrupted
due to COVID-19due to COVID-19. national emergency.”37 The loan status of such borrowers wil continue to be reported as The loan status of such borrowers wil continue to be reported as in-school
until the IHE determines that the student has withdrawn from until the IHE determines that the student has withdrawn from it.38~~it.35~~ ED has permitted IHEs to defer ED has permitted IHEs to defer
reporting a student’s withdrawn status if the IHE has a reasonable expectation that it wil reopen reporting a student’s withdrawn status if the IHE has a reasonable expectation that it wil reopen
at the start of a payment period that begins no later than at the start of a payment period that begins no later than 90 days following its COVID-19-related 90 days following its COVID-19-related
closure and that the student wil resume attendance when the IHE reopens.closure and that the student wil resume attendance when the IHE reopens.3639 This flexibility is available through the end of an IHE’s payment period that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end date for the Federal y-declared emergency related to COVID-19.”40
ED guidance does not address Perkins Loans. ED guidance does not address Perkins Loans.
Interest Accrual
Interest is charged on loans made under the Direct Loan, FFEL, and Perkins Loan programs. Interest is charged on loans made under the Direct Loan, FFEL, and Perkins Loan programs.
Typical y, under a limited set of circumstances the federal government subsidizes some or al of Typical y, under a limited set of circumstances the federal government subsidizes some or al of
the interest that would otherwise accrue on certain Direct Subsidized Loans, FFEL Stafford the interest that would otherwise accrue on certain Direct Subsidized Loans, FFEL Stafford
Loans, and Perkins Loans. Loans, and Perkins Loans.3741
For March 13, 2020, through For March 13, 2020, through ~~December 31, 2020~~September 30, 2021, the accrual of interest on , the accrual of interest on ~~federal y~~ ED-held student held student
loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan program loans held by loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan program loans held by
ED) is suspended.ED) is suspended.3842 This means borrowers wil not be responsible for paying interest on their ED- This means borrowers wil not be responsible for paying interest on their ED-
~~held loans for this period (In practice, ED-held student loan interest rates have been effectively~~
~~set to 0% during this time period.) This wil permit borrowers to enter into a period of deferment~~
~~or forbearance without concern for whether interest would accrue and capitalize. Borrowers who~~

35 36 34 C.F.R. §§674.33, 682.210, 685.204(b). 37 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “ UPDAT ED Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 . 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. 38 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDAT ED U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDAT ED
Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-
announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 . announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
3639 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “ Guidance for U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “ Guidance for
interruptions of study related to Coronavirus (COVID-19),” March 5, 2020 (updated March 20, 2020), interruptions of study related to Coronavirus (COVID-19),” March 5, 2020 (updated March 20, 2020),
https://ifap.ed.gov/electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19 . https://ifap.ed.gov/electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19 .
3740 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to Coronavirus (COVID-19)”, August 21, 2020, https://ifap.ed.gov/electronic-announcements/082120UpdatedDeadlinesFlexReltoCOVID19 . 41 Periods of interest subsidy include, but are not limited to, in-school periods while a borrower is enrolled in an eligible 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 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 . during periods of authorized deferment .
3842 T his policy was originally put T his policy was originally put ininto place via administrative action by ED on March 20, 2020. Since then, it has been extended numerous times via administrative and legislative action. Most recently, on January 20, 2021, President Biden Congressional Research Service 8 Federal Student Loan Debt Relief in the Context of COVID-19 held loans for this period. (In practice, ED-held student loan interest rates have been effectively set to 0% during this time period.) This wil permit borrowers to enter into a period of deferment or forbearance without concern for whether interest would accrue and capitalize. Borrowers who ~~place via administrative action by ED on March 20, 2020. Under the policy, interest~~
~~rates for ED-held loans were to be set to 0% for a 60-day period, beginning March 13, 2020. U.S. Department of~~
~~Education, “ Delivering on President T rump’s Promise, Secretary DeVos Suspends Federal St udent Loan Payments,~~
~~Waives Interest During National Emergency,” press release, March 20, 2020, https://www.ed.gov/news/press-releases/~~
~~delivering-president -trumps-promise-secretary-devos-suspends-federal-student -loan-payments-waives-interest-during-~~
~~national-emergency. Subsequently, the CARES Act specified that “ interest shall not accrue” on Direct Loan program~~
~~loans and ED-held FFEL program loans “ for which payment was suspended” (discussed later in this report) through~~
~~September 30, 2020. Following enactment of the CARES Act, ED updated it s guidance to borrowers, stating that the~~
~~0% interest applies to all ED-held loans, including ED-held Perkins Loans, from March 13, 2020 , to September 30,~~
~~2020. U.S. Department of Education, Office of Federal Student Aid, “ Coronavirus and Forbearance Info for Students,~~
~~Borrowers, and Parents,” https://studentaid.gov/announcements-events/coronavirus#student -questions (accessed April~~
~~14, 2020) (hereinafter, ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents”). On August 8,~~
~~2020, President T rump directed ED to extend the “waiver of all interest” on federally held student loans through~~
~~December 31, 2020. U.S. President (Donald T rump), “Continued Student Loan Payment Relief During the COVID-19~~
~~Pandemic: Memorandum for the Secretary of Education,” 85 Federal Register 49585, August 13, 2020. Subsequently,~~
~~ED updated its guidance to borrowers, stating that to effectuate the President’s direction, the 0% interest rate would be~~
~~extended through December 31, 2020. ED “ Coronavirus and Forbearance Info for Students, Borrowers, and Par ents”~~
~~(accessed August 24, 2020).~~
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continue making payments on their loans during this time of interest suspension wil not have continue making payments on their loans during this time of interest suspension wil not have
decreased monthly payments. They wil have the full amount of the payments applied toward decreased monthly payments. They wil have the full amount of the payments applied toward
loan principal.loan principal.3943 Borrowers who are eligible for this benefit need not apply for it; ED wil Borrowers who are eligible for this benefit need not apply for it; ED wil
automatical y adjust their accounts to reflect the interest suspension. automatical y adjust their accounts to reflect the interest suspension.
In addition, ED has authorized FFEL program lenders and institutions that hold Perkins Loans to In addition, ED has authorized FFEL program lenders and institutions that hold Perkins Loans to
provide the interest suspension benefit to non ED-held loans on a voluntary basis for the duration of the COVID-19 national emergency.44 ~~provide the “zero interest” benefit on these nonfederal y held loans on a voluntary basis.40~~
Borrowers who are ineligible for the Borrowers who are ineligible for the ~~zero~~ interest interest suspension benefit because their FFEL program loan holder benefit because their FFEL program loan holder
or Perkins Loan program IHE is not providing it may take advantage of the interest suspension or Perkins Loan program IHE is not providing it may take advantage of the interest suspension
period by consolidating such loans into a Direct period by consolidating such loans into a Direct Consolidation Loan, which is eligible for the Consolidation Loan, which is eligible for the
interest suspension benefit.interest suspension benefit.4145
This interest suspension, coupled with the various options for temporary cessation of payments This interest suspension, coupled with the various options for temporary cessation of payments
(e.g., forbearance, deferment) discussed throughout this report, means that qualifying borrowers (e.g., forbearance, deferment) discussed throughout this report, means that qualifying borrowers
may temporarily cease making payments on their loans without interest accruing or being subject may temporarily cease making payments on their loans without interest accruing or being subject
to to ~~capitalization~~capitalization46 when they begin to make payments again at a later point in time. when they begin to make payments again at a later point in time.
Cessation of Payments
In addition to the pre-existing deferment and forbearance options available to borrowers, ED and In addition to the pre-existing deferment and forbearance options available to borrowers, ED and
Congress have Congress have ~~recently~~ taken further steps to enable borrowers to temporarily cease making taken further steps to enable borrowers to temporarily cease making
payments on payments on their qualifying loans. their qualifying loans.
For March 13, 2020, through For March 13, 2020, through ~~December 31, 2020, federal y~~ September 30, 2021, ED-held student loans (e.g., al Direct held student loans (e.g., al Direct
Loan Loan program loans, and FFEL and Perkins Loan program loans held by ED) wil have their monthly payments suspended. (In practice, ED is placing al such loans in administrative forbearance.)47 During this time, borrowers wil not be required to make payments due on their loans.48 requested ED to extend the 0% interest rate, and ED announced it would do so through September 30, 2021. T he White House, “Pausing Federal Student Loan Payments,” press release, January 20, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/pausing-federal-student-loan-payments/; and Department of Education, Office of Federal Study Aid, Coronavirus and Forbearance Info for Students, Borrowers, and Parents, https://studentaid.gov/announcements-events/coronavirus (accessed January 28, 2021) (hereinafter ED, Forbearance Info). For additional information on the history of these actions, see ED, Waivers and Flexibilities, p. 79862. 43 ED, Forbearance Info (accessed January 28, 2021). 44 ED, Waivers and Flexibilities, p. 79862, and~~program loans, and FFEL and Perkins Loan program loans held by ED) wil be placed in an~~
~~administrative forbearance.42 During this time, borrowers wil not be required to make payments~~

~~39 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).~~
~~40 ED guidance specifies that the FFEL and Perkins Loan program loan holders may provide “the same zero interest”~~
~~benefit to the loans they hold on a voluntary basis. T he guidance references the zero interest accrual benefit applicable~~
~~from March 13, 2020, to September 30, 2020. It is unclear whether FFEL and Perkins Loan program loan holders are~~
~~authorized to extend the payment suspension through December 31, 2020. U.S.~~ Department of Education, Office of Department of Education, Office of
Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related to Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related to
Coronavirus (COVIDCoronavirus (COVID -19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/-19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/
~~040320UPDATEDGuidanceInterruptStudyRelCOVID19. Some~~ 040320UPDATEDGuidanceInterruptStudyRelCOVID19 . At least some IHEs have suspended payments on their Perkins Loans IHEs have suspended payments on their Perkins Loans
in response to COVIDin response to COVID -19. See, for example, Danielle Douglas-Gabriel, “ University of California offers Perkins Loan -19. See, for example, Danielle Douglas-Gabriel, “ University of California offers Perkins Loan
borrowers relief. Will other colleges follow?” borrowers relief. Will other colleges follow?” The Washington Post, April 20, 2020. , April 20, 2020.
~~41 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed April 14, 2020).~~
4245 ED, Forbearance Info (accessed January 28, 2021). 46 ED has indicated that any interest outstanding on a borrower’s loan before March 13, 2020, may be capitalized, depending on the status of their loan prior to March 13, 2020. For additional information, see ED, Forbearance Info (accessed January 28, 2021). 47 An administrative forbearance is a type of forbearance that ED grants without required documentation from a 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 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), 682.211(i)(2)(i), 685.205(b)(8). national emergency. 34 C.F.R. §§674.33(d)(5), 682.211(i)(2)(i), 685.205(b)(8).
48 On March 20, 2020, ED announced it had 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, Congressional Research Service Congressional Research Service
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~~due on their loans.43~~ Borrowers who are eligible for this benefit need not apply for it; ED wil Borrowers who are eligible for this benefit need not apply for it; ED wil
automatical y suspend automatical y suspend payments.payments.44
In implementing these provisions, ED has indicated that borrowers may opt out of this special In implementing these provisions, ED has indicated that borrowers may opt out of this special
administrative forbearance by contacting their loan servicer. In addition, any payments made on a administrative forbearance by contacting their loan servicer. In addition, any payments made on a
borrower’s account between March 13, 2020, and borrower’s account between March 13, 2020, and ~~December 31, 2020~~September 30, 2021, can be refunded to the , can be refunded to the
borrower. A borrower must contact his or her loan servicer to request a refund. borrower. A borrower must contact his or her loan servicer to request a refund.4549
ED has also authorized FFEL program lenders and institutions that hold Perkins Loans to provide ED has also authorized FFEL program lenders and institutions that hold Perkins Loans to provide
the special administrative forbearance to borrowers on a voluntary basisthe special administrative forbearance to borrowers on a voluntary basis~~.46~~ for the duration of the COVID-19 national emergency.50 Borrowers who are Borrowers who are
~~ineligible~~ ineligible for this benefit because their FFEL program loan holder or Perkins Loan program IHE for this benefit because their FFEL program loan holder or Perkins Loan program IHE
is not providing it may take advantage is not providing it may take advantage of the benefit by consolidating such loans into a Direct of the benefit by consolidating such loans into a Direct
Consolidation Loan. Consolidation Loan.
General y, periods of deferment and forbearance do not count toward the 120 monthly payments General y, periods of deferment and forbearance do not count toward the 120 monthly payments
required to qualify for PSLF, and are not included in a borrower’s repayment required to qualify for PSLF, and are not included in a borrower’s repayment ~~period47~~period51 (e.g., (e.g.,
periods of unemployment deferment do not count toward the maximum repayment periods of 20 periods of unemployment deferment do not count toward the maximum repayment periods of 20
or 25 years under the IDR plans). However, for Direct Loan borrowers (the only borrowers or 25 years under the IDR plans). However, for Direct Loan borrowers (the only borrowers

~~43 On March 20, 2020, ED announced it had directed all federal student loan servicers to grant a 60-day administrative~~
~~forbearance (beginning March 13, 2020) to any borrower of a federally held student loan who requested one. In~~
~~addition, ED authorized loan servicers to automatically place into a 60~~ eligible for PSLF), suspended payments that would have been made during the special administrative forbearance wil count toward the 120 monthly payments required to qualify for PSLF if the borrower works full-time in qualifying employment during the suspension.52 For borrowers of ED-held loans, the suspended payments wil also count toward the 20- and 25-year repayment periods under the IDR plans, and toward the nine voluntary payments within 10 ED authorized loan servicers to automatically place into a 60-day administrative forbearance any borrower of an ED-held loan who ~~-day administrative forbearance any borrower of~~
~~a federally held loan who~~ is more than 31 days delinquentis more than 31 days delinquent on his or her loans as of March 13, 2020, or who becomes 31 on his or her loans as of March 13, 2020, or who becomes 31
~~days delinquent~~ days delinquent thereafter. U.S. Department of Education, “thereafter. U.S. Department of Education, “ Delivering on President T rump’s Promise, Secretary DeVos Delivering on President T rump’s Promise, Secretary DeVos
Suspends Federal Student Loan Payments, Waives Interest During National Emergency,” press release, March 20, Suspends Federal Student Loan Payments, Waives Interest During National Emergency,” press release, March 20,
2020, https://www.ed.gov/news/press-releases/delivering-president -trumps-promise-secretary-devos-suspends-federal-2020, https://www.ed.gov/news/press-releases/delivering-president -trumps-promise-secretary-devos-suspends-federal-
student-loan-payments-waives-interest-during-national-emergency. Subsequently, the CARES Act was enacted, which student-loan-payments-waives-interest-during-national-emergency. Subsequently, the CARES Act was enacted, which
~~requires~~required that ED automatically suspend all payments on Direct Loans and ED-held FFEL program loans through 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 September 30, 2020. While the CARES Act did not provide for a suspension of ~~payments~~pay ments on ED-held Perkins Loan on ED-held Perkins Loan
program loans, ED has applied a similar suspension to such loans. program loans, ED has applied a similar suspension to such loans. ~~U.S. Department of Education, Office of~~
~~Postsecondary Education, “ UPDAT ED Guidance for interruptions of study related to Coronavirus (COVID -19),”~~
~~electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/~~
~~040320UPDATEDGuidanceInterruptStudyRelCOVID19 ; and ED, “ Coronavirus and Forbearance Info for Students,~~
~~Borrowers, and Parents” (accessed April 2, 2020). On August 8, 2020, President T rump directed ED to take action “to~~
~~continue the temporary cessation of payments” on federally held student loans through December 31, 2020. U.S.~~
~~President (Donald T rump), “Continued Student Loan Payment Relief During the COVID-19 Pandemic: Memorandum~~
~~for the Secretary of Education,” 85 Federal Register 49585, August 13, 2020. Subsequently, ED updated its guidance~~
~~to borrowers, stating that to effectuate the President’s directive, the administrative forbearance would be extended~~
~~through December 31, 2020. ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed~~
~~August 24, 2020).~~
~~44 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020)~~
~~45 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).~~
~~46 ED guidance specifies that the FFEL and Perkins Loan program loan holders may provide “the same … cessation of~~
~~payment benefits” to the loans they hold on a voluntary basis. T he guidance references the payment suspension~~
~~applicable from March 13, 2020, to September 30, 2020. It is unclear whether FFEL and Perkins Loan program loan~~
~~holders are authorized to extend the payment suspension through December 31, 2020. U.S.~~ED, Waivers and Flexibilities, p. 79857. Subsequently, the Administration extended the payment suspension on numerous occasions. Most recently, on January 20, 2021, President Biden requested ED to extend the payment suspension, and ED announced it would do so through September 30, 2021. T he White House, “Pausing Federal Student Loan Payments,” press release, January 20, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/pausing-federal-student-loan-payments/ and ED, Forbearance Info (accessed January 28, 2021). For additional information on the history of these actions, see ED, Waivers and Flexibilities, p. 79862. 49 ED, Forbearance Info (accessed January 28, 2021). 50 ED, Waivers and Flexibilities, p. 79862, and Department of Education, Department of Education,
Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related
to Coronavirus (COVIDto Coronavirus (COVID -19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/-19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19 . 040320UPDATEDGuidanceInterruptStudyRelCOVID19 . ~~Some~~ Some commercial FFEL program loan holders have commercial FFEL program loan holders have
voluntarily provided borrowers with additional forbearance options in response to the COVIDvoluntarily provided borrowers with additional forbearance options in response to the COVID -19 pandemic. See,-19 pandemic. See, for for
example, Marie Albiges, “ Virginiaexample, Marie Albiges, “ Virginia offers temporary relief on some private loans duringoffers temporary relief on some private loans during coronavirus,coronavirus, ” ” The Virginian-
Pilot, April 30, 2020. Some IHEs have suspended payments on their Perkins Loans in response to COVID, April 30, 2020. Some IHEs have suspended payments on their Perkins Loans in response to COVID -19. See, for -19. See, for
example, Danielle Douglas-Gabriel, “ University of California offers Perkins Loan borrowers relief. Will other colleges example, Danielle Douglas-Gabriel, “ University of California offers Perkins Loan borrowers relief. Will other colleges
follow?”, follow?”, The Washington Post, April 20, 2020. , April 20, 2020.
4751 For additional information on PSLF, see CRS Report R45389, For additional information on PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program:
Selected Issues. .
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~~eligible for PSLF) suspended payments that would have been made during the special~~
~~administrative forbearance wil count toward the 120 monthly payments required to qualify for~~
~~PSLF if the borrower works full-time in qualifying employment during the suspension.48~~
~~For borrowers of federal y held loans, the suspended payments wil also count toward the 20- and~~
~~25-year repayment periods under the IDR plans, and toward the nine voluntary payments within~~
10 52 ED, Waivers and Flexibilities, p. 79863; Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID1 9; and ED, Forbearance Info (accessed January 28, 2021). Congressional Research Service 10 Federal Student Loan Debt Relief in the Context of COVID-19 consecutive months required for individuals to rehabilitate their defaulted loans.consecutive months required for individuals to rehabilitate their defaulted loans.4953 It is unclear It is unclear
whether suspended payments on whether suspended payments on ~~nonfederal y~~ non ED-held FFEL program loans whose lender has held FFEL program loans whose lender has
authorized this special administrative forbearance would count toward the 20- and 25-year authorized this special administrative forbearance would count toward the 20- and 25-year
repayment periods under applicable IDR plans. Perkins Loans, regardless of whether they are repayment periods under applicable IDR plans. Perkins Loans, regardless of whether they are
held by ED or held by ED or an IHE, are ineligible for IDR plans. an IHE, are ineligible for IDR plans.
In addition, ED In addition, ED ~~recently~~has authorized institutions that hold Perkins Loans to grant a forbearance to authorized institutions that hold Perkins Loans to grant a forbearance to
borrowers who are in repayment and are unable to make payments due to COVID-19. Under this borrowers who are in repayment and are unable to make payments due to COVID-19. Under this
forbearance, interest would continue to accrue. The initial forbearance period may not exceed forbearance, interest would continue to accrue. The initial forbearance period may not exceed
three months, but it may be extended upon a borrower providing supporting documentation. three months, but it may be extended upon a borrower providing supporting documentation.
Borrowers must request the forbearance from the IHE. This period of forbearance counts toward Borrowers must request the forbearance from the IHE. This period of forbearance counts toward
the three-year maximum limit on the number of years of forbearance that may be granted to a the three-year maximum limit on the number of years of forbearance that may be granted to a
Perkins Loan borrower.Perkins Loan borrower.5054 This flexibility is available through the end of an IHE’s payment period that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end date for the Federal y-declared emergency related to COVID-19.”55 Income-Driven Repayment Recertification As previously described, borrowers enrol ed in an IDR plan must annual y provide documentation of their income and family size to remain eligible for IDR repayment (referred to as recertification). ED has waived this requirement for “one calendar year from the date on which a borrower would have been required to provide recertification documentation in 2020.”56 Loan servicers are to notify borrowers of their new recertification date.57
Loan Default and Collections
Defaulting on a federal student loan can result in a number of adverse consequences for a 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 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).unpaid balance of principal and interest becomes due in full).5158 In addition, the borrower loses In addition, the borrower loses
eligibility for certain borrower benefits (e.g., deferment, loan forgiveness), as wel as eligibility to eligibility for certain borrower benefits (e.g., deferment, loan forgiveness), as wel as eligibility to
receive additional Title IV federal student aid. A defaulted borrower may have his or her student receive additional Title IV federal student aid. A defaulted borrower may have his or her student
loan account transferred to an ED-contracted private collection agency (PCA) that wil contact loan account transferred to an ED-contracted private collection agency (PCA) that wil contact
the borrower and offer him or her options for voluntary debt resolution, such as loan the borrower and offer him or her options for voluntary debt resolution, such as loan
rehabilitation, consolidation out of default, or entry into a voluntary repayment agreement. If such rehabilitation, consolidation out of default, or entry into a voluntary repayment agreement. If such

~~48 Prior to enactment of the CARES Act, the ED-authorized administrative forbearance did not address whether periods~~
~~of such forbearance would count toward PSLF’s 120-monthly payment requirement. Subsequently, Section 3513(c) of~~
~~the CARES Act stated that “ED shall deem each month for which a loan payment was susp ended” under the CARES~~
~~Act “as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program.” Following~~
~~enactment of the CARES Act, ED updated its guidance to borrowers, stating that payments suspended between March~~
~~13, 2020, and September 30, 2020, would count toward PSLF’s 120 -required monthly payments. ED, “ Coronavirus and~~
~~Forbearance Info for Students, Borrowers, and Parents” (accessed April 14, 2020). T he August 8, 2020, presidential~~
~~memorandum entitled “Continued Student Loan Payment Relief During the COVID-19 Pandemic: Memorandum for~~
~~the Secretary of Education,” (85 Federal Register 49585, August 13, 2020) did not address whether payment~~
~~suspension would count toward the PSLF 120 -monthly payment requirement. Subsequently, ED updated its guidance~~
~~to borrowers, stating that payments suspended through December 31, 2020, would count toward PSLF’s 120 -required~~
~~monthly payments. ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August~~
~~24, 2020).~~
~~49 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020). 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). The history described in footnote 49 similarly applies to~~
~~suspended payments’ application to the forgiveness period under the various IDR plans and their application to loan~~
~~rehabilitation.~~
~~50 U.S. Department of Education, Office of Postsecondary Education, “UPDATED Guidance for interruptions of study~~
~~related to Coronavirus (COVID-19),” electronic announcement, April 3~~voluntary debt resolution attempts do not succeed, involuntary collection practices may be 53 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). For suspended payme nts to count toward loan rehabilitation, a borrower must have already entered into a rehabilitation agreement with ED. If a borrower was not in a rehabilitation agreement prior to the start of the paused payments, he or she may do so and any suspended paym ents following entry into the rehabilitation agreement will count toward rehabilitation. ED, Forbearance Info (accessed January 28, 2021). 54 U.S. Department of Education, Office of Postsecondary Education, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19),” electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 . 55 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilit ies related to Coronavirus (COVID-19),” August 21, 2020, https://ifap.ed.gov/electronic-, 2020, https://ifap.ed.gov/electronic-
~~announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
51announcements/082120UpdatedDeadlinesFlexReltoCOVID19 . 56 ED, Waivers and Flexibilities, pp. 79862-79863. 57 ED, Waivers and Flexibilities, p. 79863. 58 34 C.F.R. §§674.31(b)(5), 6823411(f), 685.211(d). 34 C.F.R. §§674.31(b)(5), 6823411(f), 685.211(d).
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~~voluntary debt resolution attempts do not succeed, involuntary collection practices may be~~
utilized, which include administrative wage garnishment; offset of federal income tax returns, utilized, which include administrative wage garnishment; offset of federal income tax returns,
Social Security benefits, and certain other federal benefits; and civil litigation. Social Security benefits, and certain other federal benefits; and civil litigation.5259
Collection of Defaulted Loans
For March 13, 2020, through For March 13, 2020, through ~~December 31, 2020~~September 30, 2021, ED wil halt the above-described involuntary , ED wil halt the above-described involuntary
debt collection practices, and ED-contracted PCAs wil debt collection practices, and ED-contracted PCAs wil ~~stop~~not engage in proactive collection proactive collection activities (i.e., activities (i.e.,
~~stop making~~wil not make collection cal s and collection cal s and ~~sending~~send letters or bil ing statements to defaulted borrowers) for letters or bil ing statements to defaulted borrowers) for
~~al federal y~~ al ED-held student loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan held student loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan
program loans held by ED).program loans held by ED).5360 However, borrowers may contact PCAs to continue repayment However, borrowers may contact PCAs to continue repayment
arrangements they had made prior to implementation of this policyarrangements they had made prior to implementation of this policy, to enter into a loan rehabilitation arrangement, or to consolidate their loans or to consolidate their loans
out of default.out of default.5461
Borrowers of Borrowers of ~~federal y~~ ED-held loans whose federal tax refund or Social Security benefits were in the held loans whose federal tax refund or Social Security benefits were in the
process of being withheld on or after March 13, 2020, and process of being withheld on or after March 13, 2020, and ~~before December 31, 2020~~through September 30, 2021, wil have , wil have
any offset portion returned to them. Borrowers whose wages were garnished between March 13, any offset portion returned to them. Borrowers whose wages were garnished between March 13,
2020, and 2020, and ~~December 31, 2020~~September 30, 2021, wil have their wages refunded., wil have their wages refunded.5562
In addition, ED has authorized institutions to stop collection activities on defaulted Perkins Loans In addition, ED has authorized institutions to stop collection activities on defaulted Perkins Loans
that they hold that they hold ~~through September 30, 2020,~~ upon notification from a borrower, a member of the upon notification from a borrower, a member of the
borrower’s family, or another borrower’s family, or another ~~reliable~~ reliable source that the borrower has been affected by COVID-19.source that the borrower has been affected by COVID-19.56

5263 This flexibility is available through the end of an IHE’s payment period that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end date for the Federal y-declared emergency related to COVID-19.”64 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.65 In addition, loan rehabilitation offers 59 For additional information, see 34 C.F.R. Parts 30, 31, 34; and CRS Report R44845, For additional information, see 34 C.F.R. Parts 30, 31, 34; and CRS Report R44845, Administration of the William
D. Ford Federal Direct Loan Program . .
~~53 On March 25, 2020, ED announced that, effective March 13, 2020, it would halt involuntary collection activities and~~
~~PCAs would stop all proactive collection activities on all federally held student loans for 60 days. U.S. Depart ment of~~
~~Education, “~~ 60 T his policy was originally put into place via administrative action by ED on March 25, 2020. U.S. Department of Education, “Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for Student Loan Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for Student Loan
Borrowers, Will Refund More T han $1.8 Billion to Students, Families,” press release, March 25, 2020, Borrowers, Will Refund More T han $1.8 Billion to Students, Families,” press release, March 25, 2020,
https://www.ed.gov/news/press-releases/secretary-devos-directs-fsa-stop-wage-garnishment -collections-actions-https://www.ed.gov/news/press-releases/secretary-devos-directs-fsa-stop-wage-garnishment -collections-actions-
student-loan-borrowers-will-refund-more-18-billion-students-families. student-loan-borrowers-will-refund-more-18-billion-students-families. ~~Subsequently, the CARES Act was enacted,~~
~~which required ED to suspend all involuntary collectio n activities on Direct Loans and ED-held FFEL program loans~~
~~through September 30, 2020. While the CARES Act did not provide for the suspension of proactive collection activities~~
~~on any federally held student loan, nor the suspension of involuntary collection activities on federally held Perkins~~
~~Loans program loans, ED suspended both proactive and involuntary collection activities for all federally held loans~~
~~(including federally held Perkins Loan programs loans) through September 30, 2020. ED, “ Coronavirus and~~
~~Forbearance Info for Students, Borrowers, and Parents” (accessed April 14, 2020). T he August 8, 2020, presidential~~
~~memorandum entitled “Continued Student Loan Payment Relief During the COVID-19 Pandemic: Memorandum for~~
~~the Secretary of Education,” (85 Federal Register 49585, August 13, 2020) did not address whether ED should suspend~~
~~proactive or involuntary collection activities for federally held student loans. Subsequently, ED updated its guidance to~~
~~borrowers, stating that both proactive and involunt ary collection activities would be suspended through December 31,~~
~~2020. ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).~~
~~54 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).~~
~~55 Ibid.~~
56Since then, it has been extended numerous times via administrative and legislative action. Most recently, on January 20, 2021, President Biden requested ED to extend the 0% interest rate, and ED announced it would do so through September 30, 2021. T he Wh ite House, “ Pausing Federal Student Loan Payments,” press release, January 20, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/pausing-federal-student -loan-payments/ and ED, Forbearance Info (accessed January 28, 2021). For additional information on the history of these actions, see ED, Waivers and Flexibilities, p. 79856. 61 ED, Forbearance Info (accessed January 28, 2021). 62 ED, Forbearance Info (accessed January 28, 2021). 63 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDAT ED U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDAT ED
Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-
announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 . announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
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~~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.57 In addition, loan rehabilitation offers~~
64 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to Coronavirus (COVID-19)”, August 21, 2020, https://ifap.ed.gov/electronic-announcements/082120UpdatedDeadlinesFlexReltoCOVID19 . 65 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b). Congressional Research Service 12 Federal Student Loan Debt Relief in the Context of COVID-19 defaulted borrowers an opportunity to have their loan(s) reinstated as active and to have other 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 borrower benefits and privileges restored. To rehabilitate a loan, Direct Loan, FFEL, or Perkins
Loan programLoan program, borrowers must make nine on-time payments according to general y applicable borrowers must make nine on-time payments according to general y applicable
procedures.procedures.5866 Alternatively, a borrower may use the proceeds of a new Direct Consolidation Loan 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 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 eligible to do so, a borrower must make three consecutive, on-time, full monthly payments on a
defaulted loan. defaulted loan.5967
ED has stated that ED has stated that ~~for specified periods,~~ if a borrower of a defaulted Direct Loan, FFEL, or if a borrower of a defaulted Direct Loan, FFEL, or
Perkins Loan program loan Perkins Loan program loan fails to make any of the consecutive monthly payments required to re-fails to make any of the consecutive monthly payments required to re-
establish eligibility for Title IV federal student aid,establish eligibility for Title IV federal student aid,60 to rehabilitate to rehabilitate such defaulted loans,such defaulted loans,61 or to or to
consolidate such defaulted loans out of default,consolidate such defaulted loans out of default,62 the borrower shal not be considered to have the borrower shal not be considered to have
missed any of those payments.missed any of those payments.
This is a temporary flexibility that is available in response to the COVID-19 pandemic. 68 Reporting to Consumer Reporting Agencies
Information about a borrower’s federal student loans is reported to nationwide consumer 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 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). and repayment status (e.g., whether a borrower is current on making payments).63
~~The CARES Act specifies that through September 30, 2020, ED shal~~ 69 ED has announced that through at least December 31, 2020, it would ensure that any payment ensure that any payment
that has been suspended under the special administrative forbearance described above that has been suspended under the special administrative forbearance described above ~~shall be~~

~~57 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b).~~
~~58 34. C.F.R. §§674.39, 682.405, 685.211(f).~~
~~59 34 C.F.R. §685.102(b).~~
~~60 T his policy applies to Direct Loan, FFEL, and Perkins Loan program loans through June 30, 2020. U.S. Department~~
~~of Education, Office of Postsecondary Education, “UPDAT ED Guidance for interruptions of study related to~~
~~Coronavirus (COVID-19),” electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/~~
~~040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
~~61 T his policy applies to federally held Direct Loan, FFEL, and Perkins Loan program loans through December 31,~~
~~2020. ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020). T his~~
~~policy applies to nonfederally held FFEL and Perkins Loan program loans through June 30, 2020. U.S.~~ shal be reported to a consumer reporting agency as if it were a regularly scheduled payment made by the borrower.70 Teacher Loan Forgiveness The Teacher Loan Forgiveness71 program provides loan forgiveness benefits to borrowers of qualifying Direct Loan and FFEL program loans.72 To qualify for benefits, a borrower must serve 66 34. C.F.R. §§674.39, 682.405, 685.211(f). 67 34 C.F.R. §685.102(b). 68 ED guidance is inconsistent as to the duration of this policy. Some guidance states that this policy is effective through the end of an IHE’s payment period that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end date for the Federally-declared emergency related to COVID-19.” U.S. Department of ~~Department of~~
Education, Office of Postsecondary Education, Education, Office of Postsecondary Education, ~~“UPDATED Guidance for interruptions of study~~Electronic Announcement, “Updated deadlines for flexibilities related to Coronavirus related to Coronavirus
~~(COVID-19),” electronic announcement, April 3~~(COVID-19)”, August 21, 2020, https://ifap.ed.gov/electronic-announcements/, 2020, https://ifap.ed.gov/electronic-announcements/
~~040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
~~62 T his policy applies to Direct Loans and federally held FFEL and Perkins Loans through June 30, 2020. ED,~~
~~“Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020). T he policy~~
~~applies to nonfederally held FFEL program loans through June 30, 2020. It appears this policy applies to nonfederally~~
~~held Perkins Loan program loans through June 30, 2020. U.S. Department of Education, Office of Postsecondary~~
~~Education, “UPDAT ED Guidance for interruptions of study related to Coronavir us (COVID-19),” electronic~~
~~announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/~~
~~040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
63082120UpdatedDeadlinesFlexReltoCOVID19 . Other guidance states this policy is effective (at least for Perkins Loans) through December 30, 2020. ED, Waivers and Flexibilities, p. 79862. It is unclear whether the administrative action to extend other forms of COVID-19 student loan relief through September 30, 2021, also applies to these flexibilities. 69 See, for example, U.S. Department of Education, “Master Promissory Note: Direct Subsidized Loans and Direct See, for example, U.S. Department of Education, “Master Promissory Note: Direct Subsidized Loans and Direct
Unsubsidized Loans, William D. Ford Federal Direct Loan Program,” OMB No. 1845 -0007, https://studentaid.gov/app/ Unsubsidized Loans, William D. Ford Federal Direct Loan Program,” OMB No. 1845 -0007, https://studentaid.gov/app/
subUnsubHT MLPreview.action. subUnsubHT MLPreview.action.
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~

~~reported to a consumer reporting agency as if it were a regularly scheduled payment made by the~~
~~borrower. 64~~
~~Teacher Loan Forgiveness~~
~~The Teacher Loan Forgiveness65 program provides loan forgiveness benefits to borrowers of~~
~~qualifying Direct Loan and FFEL program loans.66 To qualify for benefits, a borrower must serve~~
70 ED, Waivers and Flexibilities, p. 79863. ED guidance does not indicate how the newly extended suspended loan payments (payments suspended through September 30, 2021) will be reported to consumer reporting agencies. 71 HEA §§428J, 460. 72 For purposes of the T eacher 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 T itle IV on October 1, 1998, or as of the date the borrower first borrowed such loan after October 1, 1998. Congressional Research Service 13 Federal Student Loan Debt Relief in the Context of COVID-19 as a full-time teacher for at least five consecutive complete academic years in a qualifying school 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. or public education service agency that serves children from low -income families.
The CARES Act specifies that ED shal waive the requirement that years of qualifying teaching The CARES Act specifies that ED shal waive the requirement that years of qualifying teaching
service be consecutive if an individual’s service was temporarily interrupted due to a qualifying service be consecutive if an individual’s service was temporarily interrupted due to a qualifying
emergency, and after such temporary disruption the borrower resumes teaching and ultimately emergency, and after such temporary disruption the borrower resumes teaching and ultimately
completes a total of five years of qualifying service. Qualifying service may include service completes a total of five years of qualifying service. Qualifying service may include service
performed before, during, and after the qualifying emergency. performed before, during, and after the qualifying emergency.67
~~Additional Flexibilities~~
~~In addition to the above-described administrative and congressional actions that have been taken~~
~~in response to COVID-19, further flexibility and authority is provided through the Higher~~
~~Education Relief Opportunities for Students Act (HEROES Act).68 The HEROES Act can only be~~
~~implemented, however, in connection with a war or other military action or a national emergency~~
~~declared by the President.69 The HEROES Act provides the Secretary with authority to waive or~~
~~modify statutory and regulatory requirements that apply to the HEA Title IV student aid programs~~
~~in an effort to help affected individuals. There are three categories of affected individuals:~~
~~1. those who are serving on active duty or performing qualifying National Guard~~
~~duty during a war or other military operation or national emergency;~~
~~2. those who reside or are employed in an area that is declared a disaster area by~~
~~any federal, state, or local official in connection with a national emergency; and~~

~~64 Neither the August 8, 2020, presidential memorandum entitled “Continued Student Loan Payment Relief During the~~
~~COVID-19 Pandemic: Memorandum for the Secretary of Education,” (85 Federal Register 49585, August 13, 2020),~~
~~nor ED guidance indicate how the extended suspended loan payments (payments suspended October 1, 2020 -December~~
~~31, 2020) shall be reported to consumer reporting agencies.~~
~~65 HEA §§428J, 460.~~
~~66 For purposes of the T eacher 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 T itle IV on October 1, 1998, or as of the date the borrower first borrowed~~
~~such loan after October 1, 1998.~~
~~67 CARES Act, §3519.~~
6873 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 omission 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,74 FFEL and Perkins Loan program borrowers may consolidate their loans into a Direct Loan program Consolidation Loan to pursue BDR discharge.75 Three different standards for evaluating BDR discharge may be applied to eligible student loans. The applicable BDR standards to be used largely depends on when the Direct Loan was made. 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 has stated that FFEL and Perkins Loan program borrowers who submitted a BDR application prior to July 1, 2020, and who would need to consolidate those loans into a Direct Consolidation Loan to receive BDR relief, wil have their BDR eligibility evaluated by the standards for Direct Consolidation Loans disbursed between July 1, 2017, and July 1, 2020.76 Additional Flexibilities In addition to the above-described administrative and congressional actions that have been taken in response to COVID-19, further flexibility and authority is provided through the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act).77 The HEROES Act can only be implemented, however, in connection with a war or other military action or a national emergency declared by the President.78 The HEROES Act provides the Secretary with authority to 73 CARES Act §3519. 74 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 Im plications. 75 34 C.F.R. §685.212(k)(2). 76 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. 77 T he provisions were originally enacted by the Higher Education Relief Opportunities for Students Act of 2001 (2001 T he provisions were originally enacted by the Higher Education Relief Opportunities for Students Act of 2001 (2001
HEROES Act; P.L. 107-122; 20 U.S.C. 1070 note) with an expiration date of September 30, 2003. T he Higher HEROES Act; P.L. 107-122; 20 U.S.C. 1070 note) with an expiration date of September 30, 2003. T he Higher
Education Relief Opportunities for Students Act of 2003 (2003 HEROES Act; P.L. 108-76; 20 U.S.C. 1070 note), Education Relief Opportunities for Students Act of 2003 (2003 HEROES Act; P.L. 108-76; 20 U.S.C. 1070 note),
provided for waiver authority and regulatory flexibility from FY2003provided for waiver authority and regulatory flexibility from FY2003 -FY2005; it was extended by P.L. 109-78 to -FY2005; it was extended by P.L. 109-78 to
September 30, 2007, and finally made permanent by P.L. 110-93 (20 U.S.C. 1098aa et seq.). For additional information September 30, 2007, and finally made permanent by P.L. 110-93 (20 U.S.C. 1098aa et seq.). For additional information
on these waiver authorities, see CRS Report R42881, on these waiver authorities, see CRS Report R42881, Education-Related Regulatory Flexibilities, Waivers, and Federal
Assistance in Response to Disasters and National Em ergencies. .
6978 On March 13, 2020, President T rump declared a national emergency concerning COVID-19; “ Declaring a National On March 13, 2020, President T rump declared a national emergency concerning COVID-19; “ Declaring a National
Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” March 18, 2020, 85 Federal Register
~~15337.~~
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~
Congressional Research Service 14 Federal Student Loan Debt Relief in the Context of COVID-19 waive or modify statutory and regulatory requirements that apply to the HEA Title IV student aid programs in an effort to help affected individuals. There are three categories of affected individuals: 1. those who are serving on active duty or performing qualifying National Guard duty during a war or other military operation or national emergency; 2. those who reside or are employed in an area that is declared a disaster area by any federal, state, or local official in connection with a national emergency; and
3. those who suffered direct economic hardship as a direct result of a war or other 3. those who suffered direct economic hardship as a direct result of a war or other
military operation or national emergency. military operation or national emergency.70
~~Examples~~ ED has indicated that some of the administrative actions described above were taken under the authority of the HEROES Act. However, other examples of support that may be available to student loan borrowers under the HEROES Act of support that may be available to student loan borrowers under the HEROES Act
and that were articulated by ED prior to the COVID-19 pandemic79 include the following: include the following:
 For borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan  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 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 grace period excludes any period, not to exceed three years, during which a
borrower is an affected individual. borrower is an affected individual.
 Borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan  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 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 a 1st or 2nd category affected individual may retain their in-school status for up to
three years. During this period, the Secretary wil pay any interest that accrues on three years. During this period, the Secretary wil pay any interest that accrues on
a FFEL Stafford Loan. a FFEL Stafford Loan.
 Borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan  Borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan
programs who were in an “in-school” deferment or a graduate fel owship programs who were in an “in-school” deferment or a graduate fel owship
deferment but left school because they became a 1st or 2nd category affected 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 individual may retain their deferment for a period of up to three years during
which they are affected. During this period, the Secretary wil pay any interest which they are affected. During this period, the Secretary wil pay any interest
that accrues on a FFEL Stafford Loan. that accrues on a FFEL Stafford Loan.
 For borrowers of Perkins Loans who are in the 1st or 2nd categories of affected  For borrowers of Perkins Loans who are in the 1st or 2nd categories of affected
individuals, any forbearance granted on the basis of their status as an affected individuals, any forbearance granted on the basis of their status as an affected
individual is excluded from the usual three-year limit on forbearance. Also, for individual is excluded from the usual three-year limit on forbearance. Also, for
these categories of affected individuals, borrowers of Perkins Loans may be these categories of affected individuals, borrowers of Perkins Loans may be
granted forbearance based on an oral request and without written documentation granted forbearance based on an oral request and without written documentation
for a one-year period and an additional three-month transition period. 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  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 individuals may be granted forbearance based on an oral request and without
written documentation for a one-year period and an additional three-month written documentation for a one-year period and an additional three-month
transition period. transition period.
 For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and  For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and
FFEL program borrowers) or Perkins Loan Cancel ation (Perkins Loan program FFEL program borrowers) or Perkins Loan Cancel ation (Perkins Loan program
Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” March 18, 2020, 85 Federal Register 15337. 79 For information on the current waivers and modifications issued, see Department of Education, “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. T hese currently available waivers and modifications will expire on September 30, 2022. Congressional Research Service 15 Federal Student Loan Debt Relief in the Context of COVID-19 borrowers) on the basis of continuous or uninterrupted qualifying service, such borrowers) on the basis of continuous or uninterrupted qualifying service, such
service wil not be considered interrupted by any period during which they are in service wil 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 the 1st or 2nd categories of affected individuals or during a three-month transition
period. period.
 For borrowers who defaulted on Direct Loan, FFEL, or Perkins Loan program  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 loans and are seeking to rehabilitate their loans by making nine on-time payments
according to general y applicable procedures,according to general y applicable procedures,7180 any payments missed during any payments missed during
periods when they are in the 1st or 2nd categories of affected individuals or during periods when they are in the 1st or 2nd categories of affected individuals or during
a three-month transition period shal not be considered an interruption in the a three-month transition period shal not be considered an interruption in the
series of payments required for loan rehabilitation. series of payments required for loan rehabilitation.

~~70 For information on the current waivers and modifications issued, see Office of Postsecondary Education, Department~~
~~of Education, “ 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. T hese currently available waivers and modifications will expire on September 30, 2022.~~
~~71 34 C.F.R. §§674.39, 682.405, 685.211(f).~~
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~

 For borrowers who defaulted on Direct Loan, FFEL, or Perkins Loan program  For borrowers who defaulted on Direct Loan, FFEL, or Perkins Loan program
loans and are seeking to reestablish eligibility for Title IV federal student aid by loans and are seeking to reestablish eligibility for Title IV federal student aid by
making six consecutive on-time payments, any payments missed during periods 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-when they are in the 1st or 2nd categories of affected individuals or during a three-
month transition period shal not be considered an interruption in the series of month transition period shal not be considered an interruption in the series of
payments required for purposes of reestablishing Title IV eligibility. payments required for purposes of reestablishing Title IV eligibility.
 For borrowers who defaulted on Direct Loan or FFEL program loans and are  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 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 period when they are in the 1st or 2nd category of affected individuals or during a
three-month transition period shal not be considered an interruption in the series three-month transition period shal not be considered an interruption in the series
of payments required for purposes of reestablishing Title IV aid eligibility. of payments required for purposes of reestablishing Title IV aid eligibility.
 Borrowers who are repaying their Direct Loan or FFEL program loans according  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 to an IDR plan and because of their status as 1st or 2nd category affected
individuals are unable to provide information normal y required annual y to individuals are unable to provide information normal y required annual y to
document their income and family size may maintain their current payment 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 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 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 to be based on a standard 10-year repayment plan or an alternative repayment
plan, as applicable. plan, as applicable.

Author Information

Alexandra Hegji Alexandra Hegji

Analyst in Social Policy Analyst in Social Policy

80 34 C.F.R. §§674.39, 682.405, 685.211(f). Congressional Research Service 16 Federal Student Loan Debt Relief in the Context of COVID-19

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