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

Changes from February 8, 2021 to September 17, 2021

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Federal Student Loan Debt Relief in the
~~February 8~~September 17, 2021 , 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 ~~September 30, 2020~~March 31, 2021, $1.6 trillion in loans from these programs, borrowed by or , $1.6 trillion in loans from these programs, borrowed by or
on
on behalf of 42.9 million individuals, remained outstanding. In response to the current behalf of 42.9 million individuals, remained outstanding. In response to the current
Coronavirus Disease 2019 (COVID-19) pandemic, numerous questions have arisen regarding student loan repayment Coronavirus Disease 2019 (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. flexibilities and debt relief that 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 Department of Education (ED) held student loans  The accrual of interest on Department of Education (ED) held student loans and certain non-ED-held student loans is suspended from March 13, is suspended from March 13,
2020,2020, through through ~~September 30, 2021~~January 31, 2022. .
 ED-held student loans  ED-held student loans and certain non-ED-held student loans are being placed in a special administrative are being placed in a special administrative forbearance for March 13, 2020, through forbearance for March 13, 2020, through
~~September 30, 2021.~~ January 31, 2022. During this time, borrowers will not be required to make payments due on their loans. 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 to qualify for 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 payments 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. 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 suspended of certain federal benefits (e.g., federal income tax return benefits, Social Security benefits) are suspended
on ED-held student loans on ED-held student loans and certain non-ED-held student loans for March 13, 2020, through for March 13, 2020, through ~~September 30, 2021~~January 31, 2022. .

Congressional Research Service Congressional Research Service

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 currently authorized to be made only through the Direct Loan program.1 While new loans are currently authorized to be made only through the Direct Loan
program, previously made FFEL and Perkins Loan program loans remain outstanding and program, previously made FFEL and Perkins Loan program loans remain outstanding and
borrowers of such loans remain responsible for repaying them. borrowers of such loans remain responsible for repaying them.
As of As of ~~September 30, 2020~~March 31, 2021, approximately $1.6 tril ion in these loans, borrowed by or on behalf of , approximately $1.6 tril ion in these loans, borrowed by or on behalf of
42.9 mil ion individuals, remained outstanding.2 42.9 mil ion 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 ~~September 30, 2020~~March 31, 2021, approximately , approximately ~~35.9~~36.3 mil ion borrowers owed mil ion borrowers owed
about $1.about $1.34 tril ion in tril ion in Direct Loan debt.3 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 ~~September 30, 2020~~March 31, 2021, approximately , approximately ~~11.0~~10.6 mil ion borrowers owed about mil ion borrowers owed about
~~$245.9~~ $238.8 bil ion in FFEL program debt. Of that, approximately $bil ion in FFEL program debt. Of that, approximately $~~86.1~~85.0 bil ion was bil ion was
held by ED, representing between held by ED, representing between ~~3.0~~2.9 mil ion and 5. mil ion and 5.87 mil ion mil ion ~~borrowers,4 and~~
~~$159.8~~ borrowers4; about $129 bil ion was held by private lendersbil ion was held by private lenders ~~or guaranty agencies~~, representing , representing
debt for debt for ~~between 5.6~~about 5.0 mil ion mil ion ~~and 6.5~~borrowers; and $25.5 bil ion was held by guaranty agencies, representing debt for about 1.1 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. (IHEs) that made the loans or by ED. ~~For~~During award year 2018-2019 (July 1, 2018- award year 2018-2019 (July 1, 2018-
June 30, 2019), approximately 2.0 mil ion borrowers owed about $5.7 June 30, 2019), approximately 2.0 mil ion borrowers owed about $5.7 bil ionbil ion in in
Perkins Loans. Of that, ED held nearly $1 bil ion representing debt Perkins Loans. Of that, ED held nearly $1 bil ion 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 individuals may have 2 T his number represents an unduplicated number of federal student loan recipients. Some individuals may have
borrowed from more than one federal student loan program. As such, the numbers of borrowed from more than one federal student loan program. As such, the numbers of ~~recipients~~recipie nts for the various federal for the various federal
student loan programs presented herein sum to greater than 42.9 million. U.S. Department of Education, Office of student loan programs presented herein sum to greater than 42.9 million. U.S. Department of Education, Office of
Federal Student Aid, Federal Student Aid Data Center, “Federal Student Aid, Federal Student Aid Data Center, “ Federal Student Aid Portfolio Summary,” 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 4 Approximately ~~3.0~~2.9 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 2.87 million borrowers have FFEL program loans placed with the ED -contracted Default Management million borrowers have FFEL program loans placed with the ED -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, “ Location of Federal Aid Data Center, “ 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 5 ~~Approximately 5.4 million borrowers have FFEL program loans held by commercial lenders, and approximately 1.1~~
~~million borrowers have FFEL program loans held by guaranty agencies.~~ An individual borrower may have FFEL An individual borrower may have FFEL
program loans heldprogram loans held by a commercial lender and a guaranty agency; thus, the by a commercial lender and a guaranty agency; thus, the ~~unduplicated~~ unduplicated count of FFEL program count of FFEL program
borrowers with loans that are not held by ED isborrowers with loans that are not held by ED is unknown. U.S. Department of Education, Office of Federalunknown. U.S. Department of Education, Office of Federal Student Student
~~Aid, Federal~~ Aid, Federal Student Aid Data Center, “Student Aid Data Center, “ Location of Federal Family Education Loan Program Loans,” 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/~~LocationofFFELP Loans~~LocationofFFELPLoans.xls. .xls.
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owed for approximately 375,000 borrowers, and IHEs held about $4.7 bil ion, representing approximately 375,000 borrowers, and IHEs held about $4.7 bil ion, representing
debt for approximately 1.6 mil ion borrowers.6 debt for approximately 1.6 mil ion borrowers.6
In response to the current Coronavirus Disease 2019 (COVID-19) pandemic, numerous questions In response to the current Coronavirus Disease 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 first lists some ~~pre-existing~~preexisting loan terms and conditions (authorized through statute and regulations) 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~~Preexisting 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 of the deferment period. Periods of deferment do not (i.e., added to the principal) at the expiration 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~~
~~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,~~
~~2020.~~
7 6 CRS communication with U.S. Department of Education, Office of Legislative and Congressional Affairs, May 22, 2020. 7 Similarly, periods of deferment do not count toward the 120 monthly payments required to qualify for T emporary Expanded PSLF (T EPSLF). 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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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. 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~~
~~Loans, the subsidized component of Direct Consolidation Loans, FFEL Stafford Loans, the~~
~~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, “Aid, “ Unemployment Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/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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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 subsidized component of FFEL Consolidation Loans, and Perkins Loans. 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 accrued on Direct Loan and FFEL program loans during the period, any unpaid interest that accrued on Direct Loan and FFEL program loans 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~~

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 15 Similarly, periods of forbearance do not count toward the 120 monthly payments required to qua lify for T EPSLF. 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. .
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 forbearance (accessed ~~March 31, 2020).~~
August 12, 2021). 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/~~
~~downloadForm.action?searchT ype=library&shortName=student&localeCode=en-us&_ga=~~
~~2.148341183.986094327.1560875974 -753213604.1539381477.~~
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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 loans (e.g., loans made under the Direct Loan, FFEL, or Perkins Loan programs) equal or exceed
that amount. 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~~
~~ED and Congress have taken steps to provide additional forms of relief to federal student loan~~
~~borrowers in response to COVID-19. 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 Subsidized Loan limitations for students affected by COVID-19, temporarily~~

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=2.148341183.986094327.1560875974-753213604.1539381477. 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~~August 12, 2021) and CRS Report R45931, ) 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. 184523 U.S. Department of Education, “Income-Driven Repayment (IDR) Plan Request,” OMB No. 1845 -0102, -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 borrowerto share relevant tax return information with ED for the purpose of determining a Direct Loan borrower ’s eligibility for ’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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Administrative and Congressional Actions Taken in Response to COVID-19 ED and Congress have taken steps to provide additional forms of relief to federal student loan borrowers in response to COVID-19. These include cancel ing Direct Loans for payment periods during which qualifying individuals withdrew from their course of study due to COVID-19, temporarily suspending interest accrual on qualifying loans, expanding the instances under which suspending interest accrual on qualifying loans, expanding the instances under which a a
forbearance may be available to borrowers of qualifying loans, and temporarily ceasing forbearance may be available to borrowers of qualifying loans, and temporarily ceasing
col ections on qualifying defaulted loans. col ections on qualifying defaulted 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 period25 or period of enrollment,26 If a student does not begin attendance at an IHE in a payment period25 or period of enrollment,26
Title IV funds (including Direct Loan funds) must be returned to ED by the IHE and/or the Title IV funds (including Direct Loan funds) must be returned to ED by the IHE and/or the
student according the regulatory provisions.27 For Direct Loan amounts required to be returned by student according the regulatory provisions.27 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 the student, the IHE 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 that the student wil 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 demand letter to the borrower. The demand letter requires the borrower to repay any loan
principal and accrued interest within 30 days from the date the letter is mailed.28 If the borrower principal and accrued interest within 30 days from the date the letter is mailed.28 If the borrower
fails to comply with the demand letter, he or she is considered in default on the loan. fails to comply with the demand letter, he or she is considered in default on the loan.
ED has waived the requirement that IHEs notify loan servicers if a student wil not or has not 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, begun attendance. By waiving this requirement, loan servicers would not issue demand letters,
and borrowers would be able to repay any loans according to the terms of the promissory note, and 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. This waiver expires 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 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 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~~
~~end of the payment or enrollment period for which funds were disbursed, Title IV funds~~
~~(including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient~~
~~according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an~~

25 A payment period is the period for which a T itle IV student aid disbursement must be made. Payment periods differ 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 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 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. educational program uses. For additional information, see 34 C.F.R. §668.4.
26 A period of enrollment, often called a 26 A period of enrollment, often called a loan period, is the period for which a Direct Loan is intended. A period of , 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 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).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. 27 34 C.F.R. §668.21.
28 34 C.F.R. §685.211(e)(2). 28 34 C.F.R. §685.211(e)(2).
29 Department of Education, “Federal Student Aid Programs (Student Assistance General Provisions, Federal 29 Department of Education, “Federal Student Aid Programs (Student Assistance General Provisions, Federal ~~Perkin s~~Perkins
Loan Program, William D. Ford Federal Direct Loan Program, and Federal-Work Study Programs),” 85Loan Program, William D. Ford Federal Direct Loan Program, and Federal-Work Study Programs),” 85 Federal
Register 79860, December 11, 2020 (hereinafter ED, 79860, December 11, 2020 (hereinafter ED, Waivers and Flexibilities). ).
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Withdrawal HEA Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the end of the payment or enrollment period for which funds were disbursed, Title IV funds (including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an aid recipient is required to return any portion of a Direct Loan, he or she repays it in accordance 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 with the terms of the loan.30
The CARES Act authorizes several waivers with respect to Return of Title IV Aid procedures. 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 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.31 .31
~~Direct Subsidized Loan Limitations~~
~~Since July 1, 2013, a student who is a first-time borrower32 may only borrow Direct Subsidized~~
~~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~~
~~degree program). This is referred to as the Direct Subsidized Loan maximum eligibility period.33~~
~~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~~
~~responsible for paying the interest that accrues on his or her Direct Subsidized Loans after the~~
~~date that the maximum eligibility period is exceeded.~~
~~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~~
~~is “able to administer such policy in a manner that limits complexity and the burden on the~~
~~student.”34~~
~~Entering Repayment~~
~~In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are~~Entering Repayment In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are required to make payments on the loans during a repayment period. The repayment period for Direct Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans, and Perkins Loans begins after a grace period.32 The grace period begins after the borrower ceases to be enrolled in an eligible postsecondary program on at least a half-time basis (enrollment on at least a half-time basis is often referred to as in-school status for federal student loan purposes). The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent undergraduate students), Direct Consolidation Loans, FFEL PLUS Loans, and FFEL Consolidation Loans is required to begin when the loan is fully disbursed. However, borrowers of these loans, along with borrowers of Direct Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans, and Perkins Loans, may qualify for a deferment on 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 required to
make payments make payments on their loans but during which interest may accrue.33 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 least a half-time basis. ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans whose loan status was in-school on the date the student’s “attendance at the institution was interrupted due to COVID-19 national emergency.”34 The loan status of such borrowers wil continue to be reported as in-school until the IHE determines that the student has withdrawn from ~~on the loans during a repayment period. The repayment period for Direct~~
~~Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans,~~
~~and Perkins Loans begins after a grace period.35 The grace period begins after the borrower ceases~~
~~to be enrolled in an eligible postsecondary program on at least a half-time basis (enrollment on at~~
~~least a half-time basis is often referred to as in-school status for federal student loan purposes).~~
~~The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent~~
~~undergraduate students), Direct Consolidation Loans, FFEL PLUS Loans, and FFEL~~

30 34 C.F.R. §668.22(h)(3)(i). 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 31 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 sectiondeclared by the Secretary of Health and Human Services pursuant to section 319 of the Public Health Service Act319 of the Public Health Service Act ”; (2) ”; (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) “a national or 501, respectively, of the Robert T . Stafford Disaster Relief and Emergency Assistance Act”; or (3) “a national
emergency related to the coronavirus declared by the President under section 201 of the National Emergencies Act.” emergency related to the coronavirus declared by the President under section 201 of the National Emergencies Act.”
32 32 ~~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~~
~~July 1, 2013”; 34 C.F.R. §685.200(f)(1)(i).~~
~~33 HEA §455(q); 34 C.F.R. §685.200(f). T 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, the34 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 six months. For Perkins Loan program loans, the grace period typically ~~lasts~~la sts nine months. 33 34 C.F.R. §§674.33, 682.210, 685.204(b). 34 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://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. ED guidance does not specify which circumstances (e.g., an IHE’s temporary closure or a student’s withdrawal) constitutes an interruption due to COVID-19. Congressional Research Service 7 Federal Student Loan Debt Relief in the Context of COVID-19 it.35 ~~nine months.~~
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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~~
~~least a half-time basis.~~
~~ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans~~
~~whose loan status was in-school on the date the student’s “attendance at the institution was~~
~~interrupted due to COVID-19 national emergency.”37 The loan status of such borrowers wil~~
~~continue to be reported as in-school until the IHE determines that the student has withdrawn from~~
~~it.38~~ ED has permitted IHEs to defer reporting a student’s withdrawn status if the IHE has a ED has permitted IHEs to defer 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 reasonable expectation that it wil reopen at the start of a payment period that begins no later than
90 days following its COVID-19-related closure and that the student wil resume attendance 90 days following its COVID-19-related closure and that the student wil resume attendance
when the IHE reopens.when the IHE reopens.3936 This flexibility is available through the end of an IHE’s payment period 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 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.” date for the Federal y-declared emergency related to COVID-19.”4037
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.4138
For March 13, 2020, through For March 13, 2020, through ~~September 30, 2021~~January 31, 2022, the accrual of interest on ED-held student , the accrual of interest on ED-held student
loans loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan program loans held by (e.g., al Direct Loan program loans, and FFEL and Perkins Loan program loans held by
~~ED) is suspended.42 This means borrowers wil not be responsible for paying interest on their ED-~~

~~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.~~
38ED), specified39 defaulted FFEL program loans held by guaranty agencies (GAs)—some of which have been transferred to ED (see text box below)40—and specified previously defaulted FFEL program 35 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://Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://~~ifap~~fsapartners.ed.gov/knowledge-center/library/~~.ed.gov/~~electronic-electronic-
~~announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
39announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. 36 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “ U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “ Guidance for 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://https://~~ifap.ed.gov/electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19 .~~
40fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-03-05/guidance-interruptions-study-related-coronavirus-covid-19-updated-june-16-2020. 37 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines
for flexibilities related to Coronavirus (COVID-19)”, August 21, 2020, https://for flexibilities related to Coronavirus (COVID-19)”, August 21, 2020, https://~~ifap.ed.gov/electronic-announcements/~~
~~082120UpdatedDeadlinesFlexReltoCOVID19 .~~
41fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. 38 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 defermentduring periods of authorized deferment .
~~42 T his policy was originally put into 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~~
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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~~. 39 Defaulted FFEL program loans held by GAs that are eligible for this relief are those loans on which a default claim was paid prior to March 13, 2020, that are not subject to an active bankruptcy filing, and that were still in default as of May 12, 2021. Also included are those loans on which a default claim was paid on or after March 13, 2020, and those paid on or prior to the end of the current student loan payment pause that are not subject to an active bankruptcy filing and that were still in default as of May 12, 2021. In general, a GA pays a default claim (i.e., reimburses the FFEL program loan holder for most or all of the losses associated with a default) if a borrower defaults on their FFEL program loan. 34 C.F.R. §682.404(a). 40 T he cessation of interest accrual (“0% interest policy”) for defaulted GA-held FFEL program loans was put into place via administrative action on March 30, 2021. In doing so, ED announced that the policy would apply retroactively to March 13, 2020, but only for the period that a GA held the loa n. U.S. Department of Education, “Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press release, March 30, 2021, https://www.ed.gov/news/press-releases/department-education-announces-expansion-covid-19-emergency-flexibilities-additional-federal-student-loans-default ; and U.S. Department of Education, Office of Postsecondary Education, Dear Colleague Letter, “Exp ansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. Congressional Research Service 8 Federal Student Loan Debt Relief in the Context of COVID-19 loans41 is suspended.42 This means borrowers of these loan types wil not be responsible for paying interest on such loans for this period. (In practice, the cessation of interest accrual means that the interest rates for qualifying student loans have been effectively have been effectively
set to 0% during this time period.) This wil permit borrowers to enter into a period of deferment 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 or forbearance without concern for whether interest would accrue and capitalize. Borrowers who
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 decreased monthly payments. They wil have the full amount of the payments applied toward payments. They wil have the full amount of the payments applied toward
interest and fees (for defaulted loans only) that accrued prior to March 13, 2020, and then to loan principal.43 Borrowers who are eligible for this benefit need not apply for it; ED loan principal.43 Borrowers who are eligible for this benefit need not apply for it; ED and GAs (in the case of those currently or previously defaulted FFEL program loans specified above) wil ~~wil~~
automatical y automatical y adjust their accounts to reflect the interest suspension. 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 provide the interest suspension benefit to non ED-held loans on a voluntary basis for the duration
of the COVID-19 national emergency.44 Borrowers who are ineligible for the interest suspension of the COVID-19 national emergency.44 Borrowers who are ineligible for the interest suspension
benefit because their FFEL program benefit because their FFEL program ~~loan holder~~lender or Perkins Loan program IHE is not providing it or Perkins Loan program IHE is not providing it
may take advantage of the interest suspension period by consolidating such loans into a Direct may take advantage of the interest suspension period by consolidating such loans into a Direct
Consolidation Loan, which is eligible for the interest suspension benefit.45 Consolidation Loan, which is eligible for the interest suspension benefit.45
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~~
~~to capitalization46 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~~
~~Congress have taken further steps to enable borrowers to temporarily cease making payments on~~
~~their qualifying loans.~~
~~For March 13, 2020, through September 30, 2021, ED-held student loans (e.g., al Direct Loan~~
~~program loans, and FFEL and Perkins Loan~~ 41 T hese loans are those that were in default during the COVID-19 pandemic (regardless of when a default claim was paid) and for which the default was resolved through rehabilitation or consolidation prior to May 12, 2021. Upon rehabilitation or consolidation, the loans may have been purchased by third-party lenders or transferred to ED. For any such loans purchased by a third-party lender, it appears that the loans would be ineligible for the 0% interest policy after the purchase, as they would be FFEL program loans not held by ED. For any such loans transferred to ED, it appears that they would be eligible for the 0% interest policy after the transfer, as they would be FFEL program loans program loans held by ED. 42 T he cessation of interest accrual (“0% interest policy”) for ED-held loans was originally put into place via administrative action by ED on March 20, 2020. Since then, it has been extended numerous times via administrative and legislative action. Most recently, on August 6, 2021, ED announced a “ final extension” of the 0% interest rate policy to last through January 31, 2022. Department of Education, “ Biden Administration Extends Student Loan Pause Until January 31, 2022,” press release, August 6, 2021, https://www.ed.gov/news/press-releases/biden-administration-extends-student -loan-pause-until-january-31-2022~~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, ; and Department of Education,
Office of Federal Study Aid,Office of Federal Study Aid, ~~Coronavirus and Forbearance~~ Coronavirus Info for Students, Borrowers, and Parents, Info for Students, Borrowers, and Parents,
https://studentaid.gov/announcements-events/coronavirus (accessedhttps://studentaid.gov/announcements-events/coronavirus (accessed ~~January 28~~ August 12, 2021) (hereinafter ED, , 2021) (hereinafter ED, ~~Forbearance~~
Coronavirus Info). For additional information on the history of these actions, see ED, ). For additional information on the history of these actions, see ED, Waivers and Flexibilities, p. 79862. , p. 79862.
43 ED, 43 ED, ~~Forbearance~~Coronavirus Info (accessed (accessed ~~January 28~~August 12, 2021). , 2021).
44 ED, 44 ED, Waivers and Flexibilities, p. 79862, and Department of Education, Office of Postsecondary Education, , p. 79862, and Department of Education, Office of Postsecondary Education,
Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID -19),” Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID -19),”
April 3, 2020, https://April 3, 2020, https://~~ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. At least some IHEs have suspended payments on their Perkins Loans in response to COVIDAt least some IHEs have suspended payments on their Perkins Loans in response to COVID -19. See,-19. See, for example, for example,
Danielle Douglas-Gabriel, “ University of California offers Perkins Loan borrowers relief. Will other colleges 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.
45 ED, 45 ED, ~~Forbearance~~Coronavirus Info (accessed (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~~
~~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).~~
~~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~~
9

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

August 12, 2021). When a borrower consolidates a loan(s) into a Direct Consolidation Loan, its proceeds are used to pay off the borrower’s previous loans. T he resulting Direct Consolidation Loan is an entirely new loan with potentially different terms and conditions than the underlying loans; thus, benefits uniquely associated with the underlying loans (e.g., Perkins Loan cancellation benefits) may no longer be available upon consolidation. In addition, progress made towards loan forgiveness under the various IDR plans on the underlying loans will not count toward loan forgiveness under an IDR plan on the resulting Direct Consolidation Loan. Congressional Research Service 9 Federal Student Loan Debt Relief in the Context of COVID-19 may temporarily cease making payments on their loans without interest accruing or being subject to capitalization46 when they begin to make payments again at a later point in time. Assignment of Certain Defaulted FFEL Program Loans to ED When an FFEL borrower defaults, the loan holder files a default claim (or insurance claim) with a GA. Upon payment of the claim, which serves as payment for the holder’s losses stemming from borrower default, the holder assigns the defaulted loan to the GA, which in turn files a claim with ED for a reinsurance payment. GAs are responsible for handling initial col ections work on defaulted loans and for administering other aspects of the FFEL program. In certain instances, ED may require GAs to assign defaulted loans to it. Upon assignment, ED becomes the holder of the defaulted FFEL program loan and becomes responsible for servicing and col ecting on it (via contracted loan servicers). In addition to recently extending several of the COVID-19 pandemic student loan relief provisions (cessation of interest accrual and debt col ections) to defaulted GA-held FFEL program loans, ED is also requiring that GAs assign a subset of such loans to it. Specifical y, GAs are required to assign to ED defaulted FFEL program loans on which the GA pays a default claim to a FFEL program lender on or after March 13, 2020, and on or prior to the end date of the current student loan payment pause for ED-held loans and that are not subject to an active bankruptcy filing. Thus, ED wil become the owner of these loans and wil become responsible for servicing and col ecting on such loans. In addition, these loans wil be returned to good standing (i.e., active repayment status). Sources: 20 U.S.C. §1078(c)(8); 34 C.F.R. §682.409; and U.S. Department of Education, Office of Postsecondary Education, Dear Col eague Letter, “Expansion of Col ections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-col eague-letters/2021-05-12/expansion-col ections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. For additional information on FFEL program administration and GAs, see CRS Report R46409, Proposals to Extend CARES Act Provisions to Federal Student Loans Not Held by the Department of Education: Frequently Asked Questions. Cessation of Payments In addition to the preexisting deferment and forbearance options available to borrowers, ED and Congress have taken further steps to enable borrowers to temporarily cease making payments on their qualifying loans. For March 13, 2020, through January 31, 2022, ED-held student loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan program loans held by ED) and defaulted GA-held FFEL program loans that are transferred to ED under specified conditions (see text box)47 wil have their monthly payments suspended. (In practice, ED is placing al such loans in administrative forbearance.)48 During this time, borrowers wil not be required to make payments 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, Coronavirus Info (accessed August 12, 2021). 47 On March 30, 2021, ED announced that FFEL program loans t hat defaulted on or after March 13, 2020, would be returned to good standing. Because such loans have been returned to good standing and are now held by ED, the COVID-19 monthly payment suspension that applies to ED-held loans now applies to these loans; t hus, such borrowers are not required to make monthly payments on their loans. U.S. Department of Education “Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press release, March 30, 2021, https://www.ed.gov/news/press-releases/department -education-announces-expansion-covid-19-emergency-flexibilities-additional-federal-student -loans-default; ED, Coronavirus Info (accessed August 12, 2021). 48 An administrative forbearance is a type of forbearance that ED grants without required documentation from a borrower. Among other qualifying circumstances, ED may grant an administrative forbearance due to a local or national emergency. 34 C.F.R. §§674.33(d)(5), 682.211(i)(2)(i), 685.205(b)(8). Congressional Research Service 10 Federal Student Loan Debt Relief in the Context of COVID-19 due on their loans.49 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.
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 ~~September 30, 2021~~January 31, 2022, 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.4950
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 basis for the duration of the the special administrative forbearance to borrowers on a voluntary basis for the duration of the
COVID-19 national emergency.COVID-19 national emergency.5051 Borrowers who are ineligible for this benefit because their Borrowers who are ineligible for this benefit because their
FFEL program FFEL program ~~loan holder~~lender or Perkins Loan program IHE is not providing it may take advantage or Perkins Loan program IHE is not providing it may take advantage
of the of the benefit by consolidating such loans into a Direct Consolidation Loan.benefit by consolidating such loans into a Direct Consolidation Loan.52
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 ~~period51 (e.g.,~~
~~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~~
~~eligible for PSLF), suspended payments that would have been made during the special~~
period53 (e.g., 49 On March 20, 2020, ED announced it had directed all federal student loan servicers to grant a 60-day administrative administrative forbearance (beginning March 13, 2020) to any borrower of an ED-held student loan who requested one. In addition, ~~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 60ED authorized loan servicers to automatically place into a 60 -day administrative forbearance any borrower of an ED--day administrative forbearance any borrower of an ED-
held loan who is more than 31 days delinquent on his or her loans as of March 13, 2020, or who becomes 31 days held loan who is more than 31 days delinquent on his or her loans as of March 13, 2020, or who becomes 31 days
delinquent thereafter. U.S. Department of Education, “Delivering on President T rump’s Promise, Secretary DeVos delinquent thereafter. U.S. Department of Education, “Delivering on President T rump’s Promise, Secretary DeVos
Suspends Federal StudentSuspends Federal Student Loan Payments, Waives Interest During National Emergency,” press release, March 20, 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
required that ED automatically suspend all payments on Direct Loans and ED-held FFEL program loans through required that ED automatically suspend all payments on Direct Loans and ED-held FFEL program loans through
September 30, 2020. While the CARES Act did not provide for a suspension of September 30, 2020. While the CARES Act did not provide for a suspension of ~~pay ments~~payments on ED on ED -held Perkins Loan -held Perkins Loan
program loans, ED has applied a similar suspension to such loans. ED,program loans, ED has applied a similar suspension to such loans. ED, Waivers and Flexibilities, p. 79857. , p. 79857.
Subsequently, the Administration Subsequently, the Administration ~~extended~~ext ended the payment suspension on numerous occasions. Most the payment suspension on numerous occasions. Most recently, on 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~~ August 6, 2021, ED announced a “final extension” of the payment suspension to last through January 31, 2022. Department of Education, “ Biden Administration Extends Student Loan Pause Until January 31, 2022, ” press release, August 6, 2021, https://www.ed.gov/news/press-releases/biden-administration-extends-student-loan-pause-until-january-31-2022. For additional information on the history of these actions, see additional information on the history of these actions, see
ED, ED, Waivers and Flexibilities,, p. 79862. p. 79862.
~~49 ED,~~ ~~Forbearance~~ 50 ED, Coronavirus Info (accessed (accessed ~~January 28~~August 12, 2021). , 2021).
50It appears that borrowers of non-ED-held FFEL program loans who made voluntary payments during the payment suspension period, subsequently defaulted on their loans during the payment suspension period, and had their loans returned to good standing by the Administration would qualify for a refund of their voluntary payments, even though at the time the payment(s) was made, their loans did not qualify for the COVID-19 payment suspension. 51 ED, ED, Waivers and Flexibilities, p. 79862, and Department of Education, Office of Postsecondary Education, , p. 79862, and Department of Education, Office of Postsecondary Education,
Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID -19),” Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID -19),”
April 3, 2020, https://April 3, 2020, https://~~ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. Some commercial FFEL program loan holders have voluntarily provided borrowers with additional forbearance options Some commercial FFEL program loan holders have voluntarily provided borrowers with additional forbearance options
in response to the COVIDin response to the COVID -19 pandemic. See,-19 pandemic. See, for example, Marie Albiges, “for example, Marie Albiges, “Virginia ~~Virginia~~ offers temporary relief on some offers temporary relief on some
private loans duringprivate loans during coronavirus,coronavirus, ” ” The Virginian-Pilot, April 30, 2020. Some IHEs have suspended payments on their , April 30, 2020. Some IHEs have suspended payments on their
Perkins Loans in response to COVIDPerkins Loans in response to COVID -19. See, for example, Danielle Douglas-Gabriel, “ University of California offers -19. See, for example, Danielle Douglas-Gabriel, “ University of California offers
Perkins Loan borrowers relief. Will other colleges Perkins Loan borrowers relief. Will other colleges follow?”, The Washington Post, April 20, 2020. 52 When a borrower consolidates a loan(s) into a Direct Consolidation Loan, its proceeds are used to pay off the borrower’s previous loans. T he resulting Direct Consolidation Loan is an entirely new loan with potentia lly different terms and conditions than the underlying loans; thus, benefits uniquely associated with the underlying loans (e.g., Perkins Loan cancellation benefits) may no longer be available upon consolidation. In addition, progress made towards loan forgiveness under the various IDR plans on the underlying loans will not count toward loan forgiveness under an IDR plan on the resulting Direct Consolidation Loan. 53 Similarly, periods of deferment and forbearance do not count toward the 120 monthly payments required to qualify for T EPSLF. For additional information on PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program : Selected Issues. Congressional Research Service 11 Federal Student Loan Debt Relief in the Context of COVID-19 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 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.54 For borrowers whose loans qualify for the payment suspension, the suspended payments wil also count toward the 20- and 25-year repayment periods under the IDR plans. Suspended payments wil also count toward the nine voluntary payments within 10 consecutive months required for individuals to rehabilitate55 their defaulted loans, but only if those suspended payments occurred after a borrower entered into a rehabilitation agreement with ED.56 ED has stated that for defaulted GA-held FFEL program loan borrowers who have entered into a rehabilitation agreement, “months following entry into the agreement in which payments are not required, made, or made and then refunded per a borrower request wil be automatical y counted as a payment toward the required nine payments within 10 months.”57~~follow?”, The Washington Post, April 20, 2020.~~
~~51 For additional information on PSLF, see CRS Report R45389,~~ ~~The Public Service Loan Forgiveness Program:~~
~~Selected Issues~~.
~~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.53~~ It is unclear It is unclear
whether suspended whether suspended payments on non ED-held FFEL program loans whose lender has authorized payments on non ED-held FFEL program loans whose lender has authorized
this special administrative forbearance would count toward the 20- and 25-year repayment 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 held by ED or periods under applicable IDR plans. Perkins Loans, regardless of whether they are held by ED or
an IHE, are an IHE, are ineligible for IDR plans. ineligible for IDR plans.
In addition, ED has authorized institutions that hold Perkins Loans to grant a forbearance to In addition, ED has 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.5458 This flexibility is available through the end of an IHE’s payment period 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 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.” 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).~~59 54 Similarly, suspended payments that would have been made during the special administrative forbearance will count toward the 120 monthly payments required to qualify for T EPSLF. 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://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19; and ED, Coronavirus Info (accessed August 12, 2021). 55 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). 56 If a borrower was not in a rehabilitation agreement prior to the start of the paused payments, he or she may enter into one and any suspended payments following entry into the rehabilitation agreement will count toward rehabilitation. ED, Coronavirus Info (accessed August 13, 2021). 57 U.S. Department of Education, Office of Postsecondary Education, Dear Colleague Letter, “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. See the “ Collection on Defaulted Loans” section for additional information on refunds of payments made on defaulted GA-held FFEL Program loans. 58 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://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. 59 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to Coronavirus (COVID-19),” August 21, 2020, https://fsapartners.ed.gov/knowledge-center/ Congressional Research Service 12 Federal Student Loan Debt Relief in the Context of COVID-19 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).60 ED has waived this requirement for “one calendar year from the date on which 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.”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~~61 Subsequently, on August 6, 2021, ED announced that the payment suspension would be extended through January 31, 2022. It is unclear whether a borrower’s IDR recertification date may be extended further due to the extension of the payment suspension. ED has indicated that loan servicers are to notify borrowers of their new recertification date. Borrowers may voluntarily recertify their income during the payment suspension.62
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).5863 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) loan account transferred to an ED-contracted private collection agency (PCA) in the case of ED-held loans, or a GA in the case of defaulted non-ED-held FFEL program loans, that wil contact ~~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
voluntary debt resolution attempts do not succeed, involuntary collection practices may be 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-announcements/~~
~~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).~~
~~Congressional Research Service~~
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~

~~utilized, which include administrative wage garnishment; offset of federal income tax returns,~~
~~Social Security benefits, and certain other federal benefits; and civil litigation.59~~
~~Collection of Defaulted Loans~~
~~For March 13, 2020, through September 30, 2021, ED wil halt the above-described involuntary~~
~~debt collection practices, and ED-contracted PCAs wil not engage in proactive collection~~
~~activities (i.e., wil not make collection cal s and send letters or bil ing statements to defaulted~~
~~borrowers) for al ED-held student loans (e.g., al Direct Loan program loans, and FFEL and~~
~~Perkins Loan program loans held by ED).60 However, borrowers may contact PCAs to continue~~
~~repayment arrangements they had made prior to implementation of this policy, to enter into a loan~~
~~rehabilitation arrangement, or to consolidate their loans out of default.61~~
~~Borrowers of ED-held loans~~ utilized, which include administrative wage garnishment; offset of federal income tax returns, Social Security benefits, and certain other federal benefits; and civil litigation.64 Collection of Defaulted Loans For March 13, 2020, through January 31, 2022, ED wil halt the above-described involuntary debt collection practices, and ED-contracted PCAs and GAs wil not engage in proactive collection activities (i.e., wil not make collection cal s and send letters or bil ing statements to defaulted borrowers) for al ED-held student loans (e.g., al Direct Loan program loans, and FFEL and library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. 60 If a borrower fails to recertify their income under an IDR plan, the consequences vary depending on the plan. In general, a borrower’s monthly repayment will be recalculated in a manner that is not based on their income. Under some of the IDR plans, a borrower’s failure to recertify income annually will also result in any unpaid interest being capitalized. Under all of the IDR plans, if borrowers fails to recertify their family size, they will rem ain in their chosen IDR plan, but a family size of one will be assumed for them. If a borrower’s actual family size is larger than one, but a loan servicer assumed a family size of one due to the borrower’s failure to recertify, his or her monthly payments may increase under some IDR plans or he or she may lose eligibility to make payments based on income. U.S. Department of Education, Office of Federal Student Aid, “What happens if I don’t recertify my income and family size by the annual deadline?”, https://studentaid.gov/manage-loans/repayment/plans/income-driven#fail-to-recertify (accessed September 17, 2021). 61 ED, Waivers and Flexibilities, pp. 79862-79863. 62 ED, Coronavirus Info (accessed August 12, 2021). 63 34 C.F.R. §§674.31(b)(5), 6823411(f), 685.211(d). 64 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 . Congressional Research Service 13 Federal Student Loan Debt Relief in the Context of COVID-19 Perkins Loan program loans held by ED) and defaulted GA-held FFEL program loans,65 respectively.66 However, borrowers may contact PCAs and GAs to continue repayment arrangements they had made prior to implementation of this policy, to enter into a loan rehabilitation arrangement, or to consolidate their loans out of default.67 Borrowers of ED-held loans and defaulted GA-held loans whose federal tax refund or Social Security benefits were whose federal tax refund or Social Security benefits were ~~in the~~
~~process of being~~ withheld on or after March 13, 2020, and through withheld on or after March 13, 2020, and through ~~September 30, 2021~~January 31, 2022, wil have , wil have
any offset portion returned to them. Borrowers whose wages were garnished any offset portion returned to them. Borrowers whose wages were garnished ~~between~~ on or after March 13, March 13,
2020, and 2020, and ~~September 30, 2021~~January 31, 2022, wil have their wages refunded., wil have their wages refunded.62 Final y, borrowers of defaulted GA-held FFEL program loans who made voluntary payments on or after March 13, 2020, and through January 31, 2022, may request a refund for those payments.68
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 upon notification from a borrower, a member of the borrower’s family, or another that they hold upon notification from a borrower, a member of the borrower’s family, or another
reliable source that the borrower has been affected by COVID-19.reliable source that the borrower has been affected by COVID-19.6369 This flexibility is available This flexibility is available
through the end of an IHE’s payment period that includes December 31, 2020, or the end of the 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 IHE’s payment period “that includes the end date for the Federal y-declared emergency related to
COVID-19.” 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,~~ ~~Administration of the William~~
~~D. Ford Federal Direct Loan Program~~ .
~~60 T his policy was originally put into place via administrative action by ED on March 25, 2020~~70 65 T he policy to pause collection activities on defaulted GA-held FFEL program loans was put into place via administrative action on March 30, 2021. In doing so, ED announced that the polic y would apply retroactively to March 13, 2020. U.S. Department of Education “Department of Education Announces Expansion of COVID -19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press release, March 30, 2021, https://www.ed.gov/news/press-releases/department -education-announces-expansion-covid-19-emergency-flexibilities-additional-federal-student -loans-default; and U.S. Department of Education, Office of Postsecondary Education, Dear Colleague Letter, “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. 66 T his policy was originally put into place via administrative action by ED on March 25, 202 0. U.S. Department of . U.S. Department of
Education, “Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for Student Loan Education, “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. Since then, it has been extended numerous times student-loan-borrowers-will-refund-more-18-billion-students-families. Since then, it has been extended numerous times
via administrative and legislative action. Mostvia administrative and legislative action. Most recently, on 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~~
28August 6, 2021, ED announced a “ final extension” of the collection suspension to last through January 31, 2022. Department of Education, “ Biden Administration Extends Student Loan Pause Until January 31, 2022,” press release, August 6, 2021, https://www.ed.gov/news/press-releases/biden-administration-extends-student -loan-pause-until-january-31-2022; and ED, Coronavirus Info (accessed August 13, 2021). For additional information on the history of these actions, see ED, , 2021). For additional information on the history of these actions, see ED, Waivers and Flexibilities, p. 79856. , p. 79856.
~~61 ED,~~ ~~Forbearance~~67 ED, Coronavirus Info (accessed (accessed ~~January 28~~August 13, 2021). , 2021).
~~62 ED,~~ ~~Forbearance~~68 ED, Coronavirus Info (accessed (accessed ~~January 28~~August 13, 2021). , 2021).
6369 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://Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://~~ifap~~fsapartners.ed.gov/knowledge-center/library/~~.ed.gov/~~electronic-electronic-
~~announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .~~
64announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19. 70 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines
for flexibilities related to Coronavirus (COVID-19)”, August 21, 2020, https://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)~~fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. .
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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.71 In addition, loan rehabilitation offers 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 program, borrowers must make nine on-time payments according to general y applicable Loan program, borrowers must make nine on-time payments according to general y applicable
procedures.procedures.6672 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.6773
ED has stated that if a borrower of a defaulted Direct Loan, FFEL, or Perkins Loan program loan ED has stated that if a borrower of a defaulted Direct Loan, FFEL, or Perkins Loan program loan
fails to make any of the consecutive monthly payments required to re-establish eligibility for Title fails to make any of the consecutive monthly payments required to re-establish eligibility for Title
IV federal student aid, to rehabilitate such defaulted loans, or to consolidate such defaulted loans IV federal student aid, to rehabilitate such defaulted loans, or to consolidate such defaulted loans
out of default, the borrower shal not be considered to have missed any of those payments. This is out of default, the borrower shal not be considered to have missed any of those payments. This is
a temporary flexibility that is available in response to the COVID-19 pandemic. a temporary flexibility that is available in response to the COVID-19 pandemic. 68
74 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).6975
ED has announced that through at least ED has announced that through at least ~~December 31, 2020~~January 31, 2021, it would ensure that any payment , it would ensure that any payment
that has been suspended under the special administrative forbearance described above shal be that has been suspended under the special administrative forbearance described above shal be
reported to a consumer reporting agency as if it were a regularly scheduled payment made by the 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).~~
68borrower.76 In addition, GAs that hold defaulted FFEL program loans for which a default claim was paid on or after March 13, 2020, and prior to the end of the student loan payment pause for 71 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b). 72 34. C.F.R. §§674.39, 682.405, 685.211(f). 73 34 C.F.R. §685.102(b). 74 ED guidance is inconsistent as to the duration of this policy. Some guidance states that this policy is effective 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 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 Education, “that includes the end date for the Federally-declared emergency related to COVID-19.” U.S. Department of Education,
Office of Postsecondary Education, Electronic Announcement, “Office of Postsecondary Education, Electronic Announcement, “ Updated deadlines for flexibilities related to Updated deadlines for flexibilities related to
Coronavirus (COVID-19)”, August 21, 2020, https://Coronavirus (COVID-19)”, August 21, 2020, https://~~ifap.ed.gov/~~fsapartners.ed.gov/knowledge-center/library/electronic-announcements/electronic-announcements/
~~082120UpdatedDeadlinesFlexReltoCOVID19 . Other guidance~~ 2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. Other guidance states this policy is effective (at least for Perkins Loans) states this policy is effective (at least for Perkins Loans)
through December 30, 2020. ED, through December 30, 2020. ED, Waivers and Flexibilities, p. 79862. It is unclear whether the administrative action to , p. 79862. It is unclear whether the administrative action to
extend other forms of COVID-19 student loan relief through extend other forms of COVID-19 student loan relief through ~~September 30, 2021~~January 31, 2022, also applies to these flexibilities., also applies to these flexibilities.
69 75 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.
70 ED, Waivers and Flexibilities~~, p. 79863~~76 U.S. Department of Education, “Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, William D. Ford Federal Direct Loan Program, and Federal-Work Study Programs,” 86 Federal Register 5008, January 19, 2021. ED guidance does not indicate how the newly extended suspended loan . ED guidance does not indicate how the newly extended suspended loan
payments (payments suspended through payments (payments suspended through ~~September 30, 2021~~January 31, 2022) will be reported to consumer reporting agencies. Congressional Research Service 15 Federal Student Loan Debt Relief in the Context of COVID-19 ED-held loans are to request that consumer reporting agencies delete the record of default from the borrower’s credit report.77 Teacher Loan Forgiveness The Teacher Loan Forgiveness78 program provides loan forgiveness benefits to borrowers of qualifying Direct Loan and FFEL program loans.79 To qualify for benefits, a borrower must serve ~~) 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~~
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~~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.7380
Borrower Defense to Repayment
In certain circumstances, borrowers may seek discharge of their Title IV student loans by 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 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 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 provided. Although statutory language specifies BDR as an available discharge option only for
Direct Loan borrowers,Direct Loan borrowers,7481 FFEL and Perkins Loan program borrowers may consolidate their loans FFEL and Perkins Loan program borrowers may consolidate their loans
into a Direct Loan program Consolidation Loan to pursue BDR discharge.into a Direct Loan program Consolidation Loan to pursue BDR discharge.7582 Three different Three different
standards for evaluating BDR discharge may be applied to eligible student loans. The applicable standards for evaluating BDR discharge may be applied to eligible student loans. The applicable
BDR standards to be used largely BDR standards to be used largely ~~depends~~depend on when the Direct Loan was made. For Direct 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 Consolidation Loans made on or after July 1, 2020, the standard applicable to loans made on or
after July 1, 2020, applies. after July 1, 2020, applies.
ED has stated that FFEL and Perkins Loan program borrowers who submitted a BDR application 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 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 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. 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.~~
7483 77 U.S. Department of Education, Office of Postsecondary Education, Dear Colleague Letter, “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. 78 HEA §§428J, 460. 79 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. 80 CARES Act §3519. 81 HEA §455(h). For additional information on BDR, see CRS Report R44737, 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. .
7582 34 C.F.R. §685.212(k)(2). 34 C.F.R. §685.212(k)(2).
7683 ED, ED, Waivers and Flexibilities, p. 79863. Some view the BDR standards for loans disbursed between July 1, 2017, , 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, 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 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~~
~~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),~~
~~provided for waiver authority and regulatory flexibility from FY2003 -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.).~~ Congressional Research Service 16 Federal Student Loan Debt Relief in the Context of COVID-19 Total and Permanent Disability Discharge Borrowers of Direct Loan program loans, FFEL program loans, and Perkins Loan program loans are discharged upon being determined to have a total and permanent disability (TPD).84 Borrowers may be determined to have a total and permanent disability if they are 1. certified by a physician as unable to engage in any substantial gainful activity due to a physical or mental impairment that can be expected to result in death, has lasted continuously for at least 60 months, or can be expected to last continuously for 60 months; 2. documented by the Social Security Administration (SSA) as receiving Social Security Disability Insurance or Supplemental Security Income benefits and that their next scheduled disability review wil be within five to seven years from the date of their most recent SSA disability determination; or 3. documented by the Department of Veterans Affairs as having a service connected disability (or disabilities) that is 100% disabling or they are total y disabled based on an individual unemployability rating.85 When borrowers are determined to be total y and permanently disabled, their obligation to make any further payments on their loans is discharged. A TPD discharge approved based on the first or second criterion above is granted on a conditional basis for a three-year period that begins on the date of discharge. During the three-year period, borrowers are subject to having their loans reinstated under a variety of circumstances, including failing to annual y submit to ED documentation of their annual earnings from employment.86 On March 29, 2021, ED announced that borrowers who had a TPD discharge approved on the basis of the first or second criterion above wil not be required to submit earnings documentation during the COVID-19 emergency. This policy is retroactive to March 13, 2020. Borrowers whose loans were reinstated because they did not submit earnings documentation between March 13, 2020, and the end of the COVID-19 emergency wil have their loan discharge restored and their three-year monitoring period wil resume based on their original discharge date.87 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).88 The HEROES Act can Representative Susie Lee, December 9, 2019, https://ticas.org/wp-content/uploads/2019/12/Coalition-Letter-on-BD-CRA_.pdf. 84 HEA §§437(a), 455(a)(1), and 464(c)(1)(F)(ii); 34 C.F.R. §§674.61, 682.402, and 685.213. 85 For additional information For additional information
~~on these waiver authorities~~on T PD discharge, see CRS Report , see CRS Report ~~R42881,~~ ~~Education-Related Regulatory Flexibilities, Waivers, and Federal~~
~~Assistance in Response to Disasters and National Em ergencies~~.
~~78 On March 13, 2020, President T rump declared a national emergency concerning COVID-19; “ Declaring a National~~
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~

R45931, Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program : Term s and Conditions for Borrowers. 86 A borrower’s loans may be reinstated if the borrower has annual earnings from employment in excess of 100% of the federal poverty guidelines for a family of two. T o show compliance with this requirement, borrowers must annually submit to ED documentation of their annual earnings from employment. 34 C.F.R. §§674.61, 682.402, and 685.213. 87 U.S. Department of Education, “Education Department Announces Relief for Student Loan Borrowers with T otal and Permanent Disabilities During the COVID-19 Emergency,” press release, March 29, 2021, https://www.ed.gov/news/press-releases/education-department -announces-relief-student-loan-borrowers-total-and-permanent-disabilities-during-covid-19-emergency; and ED, Coronavirus Info (accessed August 13, 2021). 88 T he provisions were originally enacted by the Higher Education Relief Opportunities for Students Act of 2001 (2001 Congressional Research Service 17 Federal Student Loan Debt Relief in the Context of COVID-19 only be implemented, however, in connection with a war or other military action or a national emergency declared by the President.89 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 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 programs in an effort to help affected individuals. There are three categories of affected
individuals: individuals:
1. those who are serving on active duty or performing qualifying National Guard 1. those who are serving on active duty or performing qualifying National Guard
duty during a war or other military operation or national emergency; 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 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 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.
ED has indicated that some of the administrative actions described above were taken under the 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 authority of the HEROES Act. However, other examples of support that may be available to
student loan borrowers under the HEROES Act and that were articulated by ED prior to the student loan borrowers under the HEROES Act and that were articulated by ED prior to the
COVID-19 COVID-19 ~~pandemic79~~pandemic90 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~~
~~for a one-year period and an additional three-month transition period.~~
~~ Borrowers of FFEL program loans who are in the 1st or 2nd categories of affected~~
~~individuals may be granted forbearance based on an oral request and without~~
~~written documentation for a one-year period and an additional three-month~~
~~transition period.~~
~~ For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and~~
~~FFEL program borrowers) or Perkins Loan Cancel ation (Perkins Loan program~~

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), provided for waiver authority and regulatory flexibility from FY2003 -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 on these waiver authorities, see CRS Report R42881, Education-Related Regulatory Flexibilities, Waivers, and Federal Assistance in Response to Disasters and National Em ergencies. 89 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 Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” March 18, 2020, 85 Federal Register
15337. 15337.
7990 For information on the current waivers and For information on the current waivers and ~~modifications~~modificat ions issued, see Department of Education, “Federal Student Aid issued, see Department of Education, “Federal Student Aid
Programs (Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Programs (Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan
Program, and the Federal Direct Loan Program),” 82Program, and the Federal Direct Loan Program),” 82 Federal Register 45465-45471, September 29, 2017. T hese 45465-45471, September 29, 2017. T hese
currently available waivers and modifications will expire on September 30, 2022. currently available waivers and modifications will expire on September 30, 2022.
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granted forbearance based on an oral request and without written documentation for a one-year period and an additional three-month transition period.  Borrowers of FFEL program loans who are in the 1st or 2nd categories of affected individuals may be granted forbearance based on an oral request and without written documentation for a one-year period and an additional three-month transition period.  For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and FFEL program borrowers) or Perkins Loan Cancel ation (Perkins Loan program 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,8091 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.
 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~~

~~Analyst in Social Policy~~

8091 34 C.F.R. §§674.39, 682.405, 685.211(f). 34 C.F.R. §§674.39, 682.405, 685.211(f).
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Author Information Alexandra Hegji Analyst in Social Policy

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