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

Changes from September 17, 2021 to February 28, 2022

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Federal Student Loan Debt Relief in the
~~September 17, 2021~~February 28, 2022
Context of COVID-19
Alexandra Hegji
~~The~~Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the as amended) authorizes the ~~operation of~~
Analyst in Social Policy Analyst in Social Policy
operation of three federal student loan programs: the William D. Ford Federal Direct Loan three federal student loan programs: the William D. Ford Federal Direct Loan (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 March 31~~program. 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 borrowers of such loans remain responsible for repaying them. As of September 30, 2021, $1.6 trillion in loans from these programs, borrowed by or on , 2021, $1.6 trillion in loans from these programs, borrowed by or on

behalf of behalf of ~~42.9~~43.4 million individuals, remained outstanding. In response to the million individuals, remained outstanding. In response to the current COVID-19 ~~current Coronavirus~~
~~Disease 2019 (COVID-19)~~ pandemic, numerous questions have arisen regarding student loan repayment flexibilities and debt 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. 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.COVID-19. These include the following: 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 toward the 20- or 25-year repayment periods under the income-driven repayment (IDR) plans. plans.
  ~~Income-driven repayment (IDR)~~IDR plans afford borrowers the opportunity to make payments plans afford borrowers the opportunity to make payments on their loans in amounts that in amounts that
are capped at are capped at a specified share or proportion of their discretionary income over a repayment period not to 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),Security (CARES) Act (P.L. 116-136), provide additional student loan relief measures: provide additional student loan relief measures:
 The accrual of interest on Department of Education (ED) held student loans and certain non-ED-held  The accrual of interest on Department of Education (ED) held student loans and certain non-ED-held
student loans is suspended from March 13, 2020, student loans is suspended from March 13, 2020, through through ~~January 31~~May 1, 2022. , 2022.
 ED-held student loans and certain non-ED-held student loans are being placed in a special administrative  ED-held student loans and certain non-ED-held student loans are being placed in a special administrative
forbearance for March 13, 2020, through forbearance for March 13, 2020, through ~~January 31~~May 1, 2022. During this time, borrowers will not be required , 2022. During this time, borrowers will not be required
to make payments due on their loans. This special administrative forbearance will count toward the 120 to make payments due on their loans. This special administrative forbearance will count toward the 120
monthly payments required to qualify for PSLF, the 20- and 25-year repayment periods under the IDR monthly payments required to qualify for PSLF, the 20- and 25-year repayment periods under the IDR
plans, and the nine voluntary payments required for individuals to rehabilitate their defaulted loans. plans, and the nine voluntary payments required for individuals to rehabilitate their defaulted loans.
 Debt collections activities, including involuntary collection activities such as wage garnishment and offset  Debt collections activities, including involuntary collection activities such as wage garnishment and offset
of certain federal benefits (e.g., federal income tax return benefits, Social Security benefits) are suspended of certain federal benefits (e.g., federal income tax return benefits, Social Security benefits) are suspended
on ED-held student loans and certain non-ED-held student loans for March 13, 2020, through on ED-held student loans and certain non-ED-held student loans for March 13, 2020, through ~~January 31,~~
~~2022.~~
May 1, 2022.  Multiple rules related to the 120 monthly payments required to qualify for PSLF are waived for a limited time. Most prior periods of repayment are to count as a qualifying payment under PSLF, regardless of whether the borrower was enrolled in a PSLF-qualifying repayment plan or whether the payments made were late or for less than the amount due. Borrowers of FFEL and Perkins Loan program loans may consolidate their loans into a Direct Loan program Consolidation Loan by October 31, 2022, and have periods of repayment prior to the consolidation count as a PSLF-qualifying payment. In all cases, borrowers must have met PSLF employment criteria.
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Federal Student Loan Debt Relief in the Context of COVID-19

Introduction
~~The~~Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of
three federal student loan programs: the three federal student loan programs: the ~~Wil iam~~ William D. Ford Federal Direct Loan (Direct Loan) 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 ~~March 31~~September 30, 2021, approximately $1.6 , 2021, approximately $1.6 ~~tril ion~~trillion in these loans, borrowed by or on behalf of in these loans, borrowed by or on behalf of
~~42.9 mil ion~~ 43.4 million individuals,individuals,2 remained outstanding. 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 ~~March 31~~September 30, 2021, approximately , 2021, approximately ~~36.3 mil ion~~37.0 million borrowers owed about borrowers owed about
~~$1.4 tril ion in~~ $1.4 trillion in Direct Loan debt.3Direct 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 ~~March 31~~September 30, 2021, approximately 10., 2021, approximately 10.~~6 mil ion~~2 million borrowers owed about borrowers owed about ~~$238.8~~
~~bil ion~~ $230.4 billion in FFEL program debt. Of that, approximately $in FFEL program debt. Of that, approximately $~~85.0 bil ion~~83.3 billion was held by was held by
ED, representing between 2.9 ED, representing between 2.9 ~~mil ion and 5.7 mil ion borrowers4; about $129~~
~~bil ion~~ million and 5.6 million borrowers4; about $121.6 billion was held by private lenders, representing debt for about was held by private lenders, representing debt for about ~~5.0 mil ion~~
4.7 million borrowers; and $25.borrowers; and $25.~~5 bil ion~~6 billion was held by guaranty agencies, representing debt for was held by guaranty agencies, representing debt for
about 1.1 about 1.1 ~~mil ion~~ million borrowers.5borrowers.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. ~~During award year 2018-2019 (July 1,~~
~~2018-June 30, 2019), approximately 2.0 mil ion borrowers owed about $5.7~~
~~bil ion in Perkins Loans. Of that, ED held nearly $1 bil ion representing debt~~

As of September 23, 2021, ED held nearly $1.1 billion in Perkins Loans, representing debt owed for approximately 358,000 borrowers, and IHEs held about $3.4 billion, representing debt for approximately 1.2 million borrowers.6 1 For additional information on loans made under these programs, see CRS1 For additional information on loans made under these programs, see CRS Report R45931, Report R45931, Federal Student Loans
Made Through the William D. Ford Federal Direct Loan Program ~~: Term s~~: Terms and Conditions for Borrowers;; ~~CRS~~ CRS Report Report
RL31618, RL31618, ~~Cam pus~~Campus-Based Student Financial Aid ~~Program s~~Programs Under the Higher Education Act; and CRS; and CRS Report R40122, Report R40122,
Federal Student Loans Made Under the Federal ~~Fam ily~~Family Education Loan Program and the William D. Ford Federal
Direct Loan Program ~~: Term s~~: Terms and Conditions for Borrowers (archived). (archived).
2 This~~2 T his~~ number represents an unduplicated number represents an unduplicated number of federal student loan recipients. Some individualsnumber of federal student loan recipients. Some individuals may have may have
borrowedborrowed from more than one federal student loan program. As such,from more than one federal student loan program. As such, the numbers of the numbers of ~~recipie nts~~recipients for the various federal for the various federal
student loan programs presented herein sum to greater than student loan programs presented herein sum to greater than ~~42.9~~43.4 million. U.S. Department of Education million. U.S. Department of Education (ED), Office of , Office of
FederalFederal Student Aid, FederalStudent Aid, Federal Student AidStudent Aid Data Center, “Federal Student AidData Center, “Federal Student Aid Portfolio Summary,” Portfolio Summary,”
https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls, (hereinafter, ED, “https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls, (hereinafter, ED, “ Federal Federal
Student AidStudent Aid Portfolio Summary”).Portfolio Summary”).
3 ED, “Federal Student Aid3 ED, “Federal Student Aid Portfolio Summary.” Portfolio Summary.”
4 Approximately 2.9 million borrowers have FFEL program loans placed with ED-contracted loan servicers, and 4 Approximately 2.9 million borrowers have FFEL program loans placed with ED-contracted loan servicers, and
approximately 2.7 million borrowers have FFEL program loans placed with the EDapproximately 2.7 million borrowers have FFEL program loans placed with the ED -contracted Default Management -contracted Default Management
System. An individualSystem. An individual may have FFEL program loans placed with both ED-contracted loan servicers and the Default may have FFEL program loans placed with both ED-contracted loan servicers and the Default
Management System; thus, the unduplicated count of FFELManagement System; thus, the unduplicated count of FFEL program borrowers with loans held by ED isprogram borrowers with loans held by ED is unknown. ED~~unknown.~~
~~U.S. Department of Education~~, Office of Federal Student, Office of Federal Student Aid, FederalAid, Federal Student AidStudent Aid Data Center, “Data Center, “ Location of Federal Location of Federal
Family Education Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/Family Education Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/
LocationofFFELPLoans.xls. LocationofFFELPLoans.xls.
5 An individual5 An individual borrower may have FFEL program loans held by a commercial lender and a guaranty agency; thus, the borrower may have FFEL program loans held by a commercial lender and a guaranty agency; thus, the
unduplicatedunduplicated count of FFEL program borrowers with loans that are not held by ED is unknown. count of FFEL program borrowers with loans that are not held by ED is unknown. ~~U.S. Department of~~
~~Education~~ED, Office of Federal, Office of Federal Student Aid, FederalStudent Aid, Federal Student AidStudent Aid Data Center, “Data Center, “ Location of Federal Family Education Location of Federal Family Education
Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/LocationofFFELPLoans.xls. Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/LocationofFFELPLoans.xls.
6 CRS communication with ED, Office of Legislative and Congressional Affairs, October 14, 2021. An individual Congressional Research Service Congressional Research Service
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Federal Student Loan Debt Relief in the Context of COVID-19

~~owed for approximately 375,000 borrowers, and IHEs held about $4.7 bil ion,~~
~~representing debt for approximately 1.6 mil ion borrowers.6~~
~~In response to the current Coronavirus Disease 2019 (COVID-19)~~In response to the COVID-19 pandemic, numerous questions pandemic, numerous questions
have arisen regarding student loan repayment flexibilitieshave arisen regarding student loan repayment flexibilities and debt relief that may be availableand debt relief that may be available to individuals to alleviate to
~~individuals to al eviate~~ potential financial effects related to COVID-19. The HEA potential financial effects related to COVID-19. The HEA ~~general y~~
generally authorizes several options for qualifying individuals.authorizes several options for qualifying individuals. Recent administrative and congressional 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 This report provides an overview of student loan repayment flexibilities and debt relief provisions and debt relief provisions
that may be availablethat may be available to borrowers facing financial difficulties resulting from the pandemic. It to borrowers facing financial difficulties resulting from the pandemic. It
first lists some preexisting loan terms and conditions (authorized through statute and regulations) first lists some preexisting loan terms and conditions (authorized through statute and regulations)
that may be availablethat may be available to individuals. It then discusses specific administrative and congressional 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.
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 availabilityto make monthly payments; and the availability of income-driven repayment (IDR) plans (e.g., 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 hardship deferment (described below) may be ~~especial y~~especially relevant to individuals 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. borrower may have Perkins Loan program loans held by ED and an IHE. The unduplicated count of Perkins Loan program borrowers and amounts as of September 23, 2021, is unknown~~facing financial~~

~~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 7 Similarly, periods of deferment do not count toward the 120 monthly payments required to qualify for ~~T emporary~~Temporary
Expanded PSLF (Expanded PSLF (~~T EPSLF~~TEPSLF). For additional information on PSLF, see CRS). For additional information on PSLF, see CRS Report R45389, Report R45389, The Public Service Loan
Forgiveness Program : Selected Issues. .
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Federal Student Loan Debt Relief in the Context of COVID-19

~~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 availableregistered with a public or private employment agency (if one is available within 50 miles) and is within 50 miles) and is
~~diligently~~ diligently seeking to obtain full-time employment. seeking to obtain full-time employment.
The deferment may be granted for an initial The deferment may be granted for an initial six-month period, and may be extended in six-month 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.10years, 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 the subsidized component of Direct ~~Consolidation Loans~~Loan program Consolidation Loans (Direct Consolidation Loans)11, FFEL Stafford (Subsidized) Loans, the , 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.economic hardship.1112 To qualify, a borrower must be (1) receiving payments under a federal or 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.the borrower’s family size, as calculated on a monthly basis.1213
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.a cumulative maximum of three years.1314 Periods of up to three years while a borrower qualifies 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 for an economic hardship deferment may be counted as part of the repayment period for ~~eac h~~each of of
the IDR plans. the IDR plans.

8 34 C.F.R. §§674.34(d), 682.210(h) and (s)(5), 685.204(f); 8 34 C.F.R. §§674.34(d), 682.210(h) and (s)(5), 685.204(f); ~~U.S. Department of Education~~ED, Office of Federal Student , Office of Federal Student
Aid,Aid, “Unemployment Deferment Request,” OMB“Unemployment Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/No. 1845-0011, https://studentloans.gov/myDirectLoan/
downloadForm.action?downloadForm.action?~~searchT ype~~searchType=library&shortName=unemploy&localeCode=en-us&_ga==library&shortName=unemploy&localeCode=en-us&_ga=
2.212772371.684834368.15561193132.212772371.684834368.1556119313 --753213604.1539381477. 753213604.1539381477.
9 For Perkins Loan program loans, IHEs must reaffirm continued deferment eligibility on at least an annual basis;9 For Perkins Loan program loans, IHEs must reaffirm continued deferment eligibility on at least an annual basis; 34 34
C.F.R.C.F.R. §674.38(d). §674.38(d).
10 After a period of unemployment deferment, a Perkins Loan borrower is entitled to a post 10 After a period of unemployment deferment, a Perkins Loan borrower is entitled to a post -deferment grace period of -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 11 Consolidation Loans allow individuals who have at least one loan borrowed through the Direct Loan program or the FFEL program to refinance their eligible federal student loan debt by borrowing a new loan and using the proceeds to pay off their existing federal student loan obligations. 12 34 C.F.R. §§674.34(e), 682.210(s)(6), 685.204(g); 34 C.F.R. §§674.34(e), 682.210(s)(6), 685.204(g); ~~U.S. Department of Education~~ED, Office of Federal Student Aid, , Office of Federal Student Aid,
“Economic Hardship Deferment Request,” OMB“Economic Hardship Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/No. 1845-0011, https://studentloans.gov/myDirectLoan/
downloadForm.action?downloadForm.action?~~searchT ype~~searchType=library&shortName=ecohardshp&localeCode=en-us&_ga==library&shortName=ecohardshp&localeCode=en-us&_ga=
2.9995570.684834368.1556119313-753213604.1539381477. 2.9995570.684834368.1556119313-753213604.1539381477.
1213 A borrower may also qualify A borrower may also qualify for an economic hardship deferment if he or she is serving as a volunteer in the Peace for an economic hardship deferment if he or she is serving as a volunteer in the Peace
Corps. Corps.
1314 After a period of economic hardship deferment, a Perkins Loan borrower is entitled to a post After a period of economic hardship deferment, a Perkins Loan borrower is entitled to a post -deferment grace period -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 During an economic hardship deferment, an interest subsidy is provided on Direct Subsidized
Loans, the subsidized component of Direct Consolidation Loans, FFEL Stafford Loans, the Loans, the subsidized component of Direct Consolidation Loans, FFEL Stafford Loans, the
subsidized component of FFEL Consolidation Loans, and Perkins Loans. subsidized component of FFEL Consolidation Loans, and Perkins Loans.
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 to accrue) and borrowers ultimately remain responsible for paying al all of the interest that accrues 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 principal balance of Direct forbearance period, any unpaid accrued interest is capitalized into the principal balance of Direct
Loan program and FFEL program loans; it is not Loan program and FFEL program loans; it is not ~~capitalized~~capitalized15 (but remains due) for Perkins Loan (but remains due) for Perkins Loan
program loans.program loans.1416 Periods of forbearance do not count toward the 120 monthly payments required Periods of forbearance do not count toward the 120 monthly payments required
to qualify for PSLF,to qualify for PSLF,1517 and are not included in a borrower’s repayment period (e.g., periods of 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). or 25 years under the IDR plans). ~~General y~~Generally, borrowers must apply for forbearance. , 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~~especially relevant to individuals relevant to individuals facing financial difficulties due to COVID-19. These types of 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.change in employment, medical expenses, or other reasons.1618
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.borrower’s request, and limited to a maximum of 36 months.1719 At the end of the forbearance 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.20 15 On certain occasions, any interest that has accrued but not been paid by the borrower may be added to the outstanding principal balance of the borrower’s loan; this is known as interest capitalization. When interest capitalizes, it becomes part of the outstanding principal balance and interest begins to accrue on that new, larger loan amount. 16
~~Student Loan Debt Burden Forbearance~~
~~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~~

14 34 C.F.R. §§674.33(d), 382.211(a)(4), 385.205(a). 34 C.F.R. §§674.33(d), 382.211(a)(4), 385.205(a).
1517 Similarly, periods of forbearance do not count toward the 120 monthly payments required to Similarly, periods of forbearance do not count toward the 120 monthly payments required to ~~qua lify for T EPSLF~~qualify for TEPSLF. .
For additional information on PSLF, see CRSFor additional information on PSLF, see CRS Report R45389, Report R45389, The Public Service Loan Forgiveness Program : Selected
Issues. .
16 18 34 C.F.R. §§674.33(d)( 34 C.F.R. §§674.33(d)(f5)(ii), 682.211(a)(2)(i), 685.205(a)(1); )(ii), 682.211(a)(2)(i), 685.205(a)(1); ~~U.S. Department of Education~~ED, “General Forbearance , “General Forbearance
Request,”Request,” OMB No. 1845-0031, https://studentloans.gov/myDirectLoan/downloadForm.action?searchType=library&OMB No. 1845-0031, https://studentloans.gov/myDirectLoan/downloadForm.action?searchType=library&
shortName=general&localeCode=en-us&_ga=2.218639505.986094327.1560875974shortName=general&localeCode=en-us&_ga=2.218639505.986094327.1560875974 -753213604.1539381477. -753213604.1539381477.
~~17 U.S. Department of Education~~19 General forbearance is available to FFEL and Direct Loan program borrowers for up to 36 months. General forbearance, alone or in combination with any other type of forbearance, is available to Perkins Loan borrowers for a cumulative period of 36 months. ED, “General Forbearance Request,” OMB No. 1845-0031, https://studentloans.gov/, “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=
2.218639505.986094327.15608759742.218639505.986094327.1560875974 -753213604.1539381477; -753213604.1539381477; ~~U.S. Department of Education~~ED, Office of Federal , Office of Federal
Student Aid,Student Aid, “Student Loan Forbearance,” https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/“Student Loan Forbearance,” https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/
forbearance (accessedforbearance (accessed ~~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~~ February 7, 2022). 20 In general, interest does not capitalize on Perkins Loans following periods of forbearance.
Congressional Research Service Congressional Research Service
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Federal Student Loan Debt Relief in the Context of COVID-19

Student Loan Debt Burden Forbearance 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.21 To qualify, a borrower must demonstrate that his or her required monthly payments on HEA Title IV federal student must demonstrate that his or her required monthly payments on HEA Title IV federal student
loans (e.g., loans made under the Direct Loan, FFEL, or Perkins Loan programs) equal or exceed 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.22
Income-Driven Repayment Plans
IDR IDR ~~plans19~~plans23 afford borrowers the opportunity to make payments in amounts that are capped at a 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 income2024 over a repayment period not to 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(ICR) plan, the Income-Based Repayment (IBR) plans (one version of which is available to
~~individuals~~ to individuals who qualify as a new borrower on or after July 1, 2014; and another which is who qualify as a new borrower on or after July 1, 2014; and another which is
availableavailable to individualsto individuals who do not qualify as a new borrower as of that date), the Pay As You 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 general, Direct Loan borrowers (other than Parent PLUS ~~Loan~~Loan25 borrowers) are eligible for any of borrowers) are eligible for any of
these plans.these plans.2126 FFEL program borrowers (other than Parent PLUS loan borrowers) are only eligible FFEL program borrowers (other than Parent PLUS loan borrowers) are only eligible
for the IBR plans.for the IBR plans.2227 Perkins Loan borrowers are not eligible for any IDR plan. Perkins Loan borrowers are not eligible for any IDR plan.
Individuals must apply to repay their loans according to an IDR plan. Individuals must apply to repay their loans according to an IDR plan.2328 In addition, they must In addition, they must
~~annual y~~annually provide documentation of their income and family size provide documentation of their income and family size, which is used to determine their discretionary income, to remain eligible to remain eligible for IDR for IDR
repayment.repayment.2429 Borrowers may update their 21 34 C.F.R. §674.33(d)(5)(i), 682.211(h)(2)(i)(B), 685.205(a)(6); ED, Mandatory Forbearance Request, ~~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~~
~~recalculated accordingly.~~

~~Forbearance Request,~~ “Student Loan Debt Burden,”“Student Loan Debt Burden,” OMB No. 1845OMB No. 1845 -0018, https://studentloans.gov/myDirectLoan/-0018, https://studentloans.gov/myDirectLoan/
downloadForm.action?downloadForm.action?~~searchT ype=~~searchType=library&shortName=student&localeCode=en-us&_ga=library&shortName=student&localeCode=en-us&_ga=
2.148341183.986094327.1560875974-753213604.1539381477. 2.148341183.986094327.1560875974-753213604.1539381477.
~~19 For additional information on the IDR plans, see U.S. Department of Education~~ 22 General forbearance is available to FFEL and Direct Loan program borrowers for up to 36 months. General forbearance, alone or in combination with any other type of forbearance, is available to Perkins Loan borrowers for a cumulative period of 36 months. 34 C.F.R. §§674.33(d)(5)(i), 682.211(h)(2)(i)(B), 685.205(a)(6). 23 For additional information on the IDR plans, see ED, Office of Federal Student Aid, , 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
~~August~~ August 12, 2021) and CRS12, 2021) and CRS Report R45931, Report R45931, Federal Student Loans Made Through the William D. Ford Federal Direct
Loan Program ~~: Term s~~: Terms and Conditions for Borrowers. .
20 24 Discretionary income is definedDiscretionary income is defined as the portion of a borrower’s adjustedas the portion of a borrower’s adjusted ~~gross~~ gross income that is in excess of a specified 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.~~
~~22 34 C.F.R. §682.215.~~
~~23 U.S. Department of Education~~25 A parent of a dependent undergraduate student may borrow Parent PLUS on behalf of the student to help finance the cost of the student’s postsecondary education. 26 34 C.F.R. §685.208. 27 34 C.F.R. §682.215. 28 ED, “Income-Driven Repayment (IDR) Plan Request,” OMB No. 1845, “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.
2429 On December 19, 2019, the Fostering Undergraduate On December 19, 2019, the Fostering Undergraduate ~~T alent~~Talent by Unlocking Resources by Unlocking Resources for Education Act (the for Education Act (the
~~FUT URE~~FUTURE Act; P.L. 116-91) was enacted. Among other provisions, P.L. 116-91 authorizes the Internal Revenue Service Act; P.L. 116-91) was enacted. Among other provisions, P.L. 116-91 authorizes the Internal Revenue Service
to share relevant tax return information with ED for the purpose of determining a Direct Loan borrower’s eligibilityto share relevant tax return information with ED for the purpose of determining a Direct Loan borrower’s eligibility ~~for~~
~~and repayment obligations under IDR plans. As of the publication date of this report, it appears these procedures have~~
~~not yet been operationalized.~~
for Congressional Research Service Congressional Research Service
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Federal Student Loan Debt Relief in the Context of COVID-19

income and family size at any time if either changes. Upon submission of such information, a borrower’s monthly payment amount will be 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 ED and Congress have taken steps to provide additional forms of relief to federal student loan
borrowers in response to COVID-19. These include borrowers in response to COVID-19. These include ~~cancel ing~~cancelling Direct Loans for payment periods Direct Loans for payment periods
during which qualifying individualsduring which qualifying individuals withdrew from their course of study due to COVID-19, withdrew from their course of study due to COVID-19,
temporarily suspending interest accrual on qualifying loans, expanding the instances under which temporarily suspending interest accrual on qualifying loans, expanding the instances under which
a forbearance may be available to borrowers of qualifying loans, and temporarily ceasing a forbearance may be available to borrowers of qualifying loans, and temporarily ceasing
~~col ections~~collections on qualifying defaulted loans. on qualifying defaulted loans.
Returning Direct Loans
Under the HEA, a Direct Loan borrower may be required to return or repay Under the HEA, a Direct Loan borrower may be required to return or repay al all or part of the or part of the
Direct Loans borrowed if the student does not complete a payment or enrollment period at an IHE Direct Loans borrowed if the student does not complete a payment or enrollment period at an IHE
for which the loan was received. Required procedures for such returns or repayments vary for which the loan was received. Required procedures for such returns or repayments vary
depending on whether a student did not begin attendance at an IHE or whether he or she depending on whether a student did not begin attendance at an IHE or whether he or she
withdrew. withdrew.
Failure to Begin Attendance
If a student does not begin attendance at an IHE in a payment If a student does not begin attendance at an IHE in a payment ~~period25~~period30 or period of enrollment, or period of enrollment,2631
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.student according the regulatory provisions.2732 For Direct Loan amounts required to be returned by 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 that the student ~~wil~~ will not begin or has not begun attendance. Loan servicers then issue a final 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.principal and accrued interest within 30 days from the date the letter is mailed.2833 If the borrower 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 ED has waived the requirement that IHEs notify loan servicers if a student ~~wil~~ will not or has not 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~~
~~national emergency related to COVID-19 is rescinded.”29~~

25 and repayment obligations under IDR plans. As of the publication date of this report, it appears these procedures have not yet been operationalized. 30 A payment period is the period for which A payment period is the period for which ~~a T itle~~ a Title IV student aid IV student aid ~~disbursement must be~~ disbursement must be made. Payment periods differ made. Payment periods differ
by IHE and may also differ by educational programs within IHEs, basedby IHE and may also differ by educational programs within IHEs, based on a variety of criteria including whether an on a variety of criteria including whether an
educational program is measurededucational program is measured in clock- or creditin clock- or credit -hours and the type of term (e.g., semester, trimester, quarter) the -hours and the type of term (e.g., semester, trimester, quarter) the
educational program uses.educational program uses. For additional information, see 34 C.F.R. §668.4. For additional information, see 34 C.F.R. §668.4.
2631 A period of enrollment, often called a A period of enrollment, often called a loan period, is the period for which, is the period for which a Direct Loan is intended. A period of a Direct Loan is intended. A period of
enrollment “must coincide with one or more bona fide academic terms establishedenrollment “must coincide with one or more bona fide academic terms established by the school for which institutional by the school for which institutional
charges are generally assessedcharges are generally assessed (e.g., a semester, trimester, or quarter).” 34 C.F.R. §685.201(b).(e.g., a semester, trimester, or quarter).” 34 C.F.R. §685.201(b).
27 32 34 C.F.R. §668.21. 34 C.F.R. §668.21.
2833 34 C.F.R. §685.211(e)(2). Congressional Research Service 6 Federal Student Loan Debt Relief in the Context of COVID-19 at the end of the IHE’s “payment period that begins after the date on which the Federally-declared national emergency related to COVID-19 is rescinded.”34 Withdrawal HEA ~~34 C.F.R. §685.211(e)(2).~~
~~29 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),” 85~~ ~~Federal~~
~~Register~~ ~~79860, December 11, 2020 (hereinafter ED, Waivers and Flexibilities).~~
~~Congressional Research Service~~
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~

~~Withdrawal~~
~~HEA~~ Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the
end of the payment or enrollment period for which funds were disbursed, Title IV funds end of the payment or enrollment period for which funds were disbursed, Title IV funds
(including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient (including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient
according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an
aid recipient is required to return any portion of a Direct Loan, he or she repays it in accordance 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.with the terms of the loan.3035
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..3136
Entering Repayment
In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are required to In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are required to
make payments on the loans during a repayment period. The repayment period for Direct make payments on the loans during a repayment period. The repayment period for Direct
Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans, Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans,
and Perkins Loans begins after a grace period.and Perkins Loans begins after a grace period.3237 The grace period begins after the borrower ceases The grace period begins after the borrower ceases
to be enrolled in an eligibleto be enrolled in an eligible postsecondary program on at least a half-time basis (enrollment on at postsecondary program on at least a half-time basis (enrollment on at
least a half-time basis is often referred to as least a half-time basis is often referred to as in-school status for federal student loan purposes). for federal student loan purposes).
The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent
undergraduate students), Direct Consolidation Loans, FFEL PLUS Loans, and FFEL undergraduate students), Direct Consolidation Loans, FFEL PLUS Loans, and FFEL
Consolidation Loans is required to begin when the loan is fully disbursed. However, borrowers of 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 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 Stafford Loans, FFEL Unsubsidized Loans, and Perkins Loans, may qualify for a deferment on
the basis of their the basis of their in-school status (or the in-school status of the student on whose behalf a PLUS (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 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.on their loans but during which interest may accrue.3338 A borrower qualifies for such an in-school A borrower qualifies for such an in-school
deferment if he or she, or the student on whose behalf a PLUS Loan is made, is enrolled on at deferment if he or she, or the student on whose behalf a PLUS Loan is made, is enrolled on at
least a half-time basis. least a half-time basis.
ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans
whose loan status was whose loan status was in-school on the date the student’s “attendance at the institution was 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~~

~~30 34 C.F.R. §668.22(h)(3)(i).~~
~~31 T he CARES Act defines a qualifying~~ 34 ED, “Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, William D. Ford Federal Direct Loan Program, and Federal-Work Study Programs),” 85 Federal Register 79860, December 11, 2020 (hereinafter ED, Waivers and Flexibilities). 35 34 C.F.R. §668.22(h)(3)(i). 36 The CARES Act defines a qualifying emergency as (1) “a public health emergency related to the coronavirus emergency as (1) “a public health emergency related to the coronavirus
declareddeclared by the Secretary of Health and Human Servicesby the Secretary of Health and Human Services pursuant to section 319 of the Public Health Servicepursuant to section 319 of the Public Health Service Act”; (2) Act”; (2)
an event related to the coronavirus for which the President declared a major disaster or an emergency underan event related to the coronavirus for which the President declared a major disaster or an emergency under section 401 section 401
or 501, respectively, of the Robert Tor 501, respectively, of the Robert T . Stafford Disaster Relief and Emergency Assistance Act”; or (3) “a national . 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.”
3237 34 C.F.R. §§674.31, 682.209, 685.207. For Direct Loan program and FFEL program loans, the grace period typically 34 C.F.R. §§674.31, 682.209, 685.207. For Direct Loan program and FFEL program loans, the 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 ~~la sts~~lasts nine months. nine months.
33 38 34 C.F.R. §§674.33, 682.210, 685.204(b). Congressional Research Service 7 Federal Student Loan Debt Relief in the Context of COVID-19 interrupted due to COVID-19 national emergency.”39 The loan status of such borrowers will continue to be reported as in-school until the IHE determines that the student has withdrawn from it.40 ~~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~~ 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 reasonable expectation that it ~~wil~~ will reopen at the start of a payment period that begins no later than 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 90 days following its COVID-19-related closure and that the student ~~wil~~ will resume attendance resume attendance
when the IHE reopens.when the IHE reopens.3641 This flexibility is available This flexibility is available through the end of an 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 that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end
date for the date for the ~~Federal y~~Federally-declared emergency related to COVID-19-declared emergency related to COVID-19~~.”37~~
,” whichever is later.42 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~~Typically, under a limited set of circumstances the federal government subsidizes some or , under a limited set of circumstances the federal government subsidizes some or al all of 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.38
43 For March 13, 2020, through For March 13, 2020, through ~~January 31~~May 1, 2022, the accrual of interest on ED-held student loans , 2022, the accrual of interest on ED-held student loans
(e.g., (e.g., al all Direct Loan program loans, and FFEL and Perkins Loan program loans held by ED), Direct Loan program loans, and FFEL and Perkins Loan program loans held by ED),
~~specified39~~specified44 defaulted FFEL program loans held by guaranty agencies (GAs)—some of which have defaulted FFEL program loans held by guaranty agencies (GAs)—some of which have
been transferred to ED (see text box below)been transferred to ED (see text box below)4045—and specified previously defaulted FFEL program —and specified previously defaulted FFEL program

~~35 U.S. Department of Education~~ 39 ED, Office of Postsecondary Education, Electronic Announcement, “, Office of Postsecondary Education, Electronic Announcement, “~~UPDAT ED~~
~~Guidance~~ UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://fsapartners.ed.gov/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-knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-
coronavirus-covid-19. coronavirus-covid-19.
~~36 U.S. Department of Education,~~ 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. 40 ED, 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. 41 ED, Office of Postsecondary Education, Electronic Announcement, “Guidance for Office of Postsecondary Education, Electronic Announcement, “Guidance for
interruptions of study related to Coronavirus (COVID-19),” March 5, 2020 (updated interruptions of study related to Coronavirus (COVID-19),” March 5, 2020 (updated ~~March 20~~June 16, 2020), , 2020),
https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-03-05/guidance-interruptions-https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-03-05/guidance-interruptions-
study-related-coronavirus-covid-19-updated-june-16-2020. study-related-coronavirus-covid-19-updated-june-16-2020.
~~37 U.S. Department of Education~~42 ED, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines , Office of Postsecondary Education, Electronic Announcement, “Updated deadlines
for flexibilities related to Coronavirus (COVID-19)for flexibilities related to Coronavirus (COVID-19)”,,” August August 21, 2020, https://fsapartners.ed.gov/knowledge-center/21, 2020, https://fsapartners.ed.gov/knowledge-center/
library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19.
38 43 Periods of interest subsidy Periods of interest subsidy include, butinclude, but are not limited to, in-school periods whileare not limited to, in-school periods while a borrower is enrolled in an eligible a borrower is enrolled in an eligible
program on at least a half-time basis, duringprogram on at least a half-time basis, during a grace period followinga grace period following enrollment on at least a halfenrollment on at least a half -time basis, and -time basis, and
duringduring periods of authorized deferment. periods of authorized deferment.
3944 Defaulted FFEL program loans held by GAs Defaulted FFEL program loans held by GAs that are eligiblethat are eligible for this relief are those loans on whichfor this relief are those loans on which a default claim a default claim
waswas paid prior to March 13, 2020, that are not subject to an active bankruptcy filing, and that were still in default as of 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 includedMay 12, 2021. Also included are those loans on which a default claim wasare those loans on which a default claim was paid on or after March 13, 2020, and those 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 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 GAand that were still in default as of May 12, 2021. In general, a GA pays a default claim (i.e., reimbursespays a default claim (i.e., reimburses the FFEL 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 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). program loan. 34 C.F.R. §682.404(a).
~~40 T he~~ 45 The cessation of interest accrual (“0% interest policy”) for defaulted GA-held FFEL cessation of interest accrual (“0% interest policy”) for defaulted GA-held FFEL program loans wasprogram loans was put into put into
place via administrative action on March 30, 2021. In doing so, ED announced that the policy wouldplace via administrative action on March 30, 2021. In doing so, ED announced that the policy would apply apply
retroactively to March 13, 2020, but only for the period that a GA held the retroactively to March 13, 2020, but only for the period that a GA held the ~~loa n. U.S. Department of Education,~~
loan. ED, “Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal“Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal Student Student
Loans in Default,” press release, March 30, 2021, https://www.ed.gov/news/press-releases/department-education-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-defaultannounces-expansion-covid-19-emergency-flexibilities-additional-federal-student-loans-default ~~; and U.S. Department~~
~~of Education~~; and ED, Office of Postsecondary Education, Dear ~~, 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.~~
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~~loans41~~loans46 is suspended. is suspended.4247 This means borrowers of these loan types This means borrowers of these loan types ~~wil~~ will not be responsible for not be responsible for
paying interest on such loans for this period. (In practice, the cessation of interest accrual means 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 set to 0% during this time that the interest rates for qualifying student loans have been effectively set to 0% during this time
period.) This period.) This ~~wil~~ will permit borrowers to enter into a period of deferment or forbearance without permit borrowers to enter into a period of deferment or forbearance without
concern for whether interest would accrue and capitalize. Borrowers who continue making concern for whether interest would accrue and capitalize. Borrowers who continue making
payments on their loans during this time of interest suspension payments on their loans during this time of interest suspension ~~wil~~ will not have decreased monthly not have decreased monthly
payments. They payments. They ~~wil~~ will have the full amount of the payments applied toward interest and fees (for 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.defaulted loans only) that accrued prior to March 13, 2020, and then to loan principal.4348
Borrowers who are eligible for this benefit need not apply for it; ED and GAs (in the case of 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) those currently or previously defaulted FFEL program loans specified above) ~~wil automatical y~~
will automatically 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.of the COVID-19 national emergency.4449 Borrowers who are ineligible for the interest suspension Borrowers who are ineligible for the interest suspension
benefit because their FFEL program lender or Perkins Loan program IHE is not providing it may benefit because their FFEL program lender or Perkins Loan program IHE is not providing it may
take advantage of the interest suspension period by consolidating such loans into a Direct take advantage of the interest suspension period by consolidating such loans into a Direct
Consolidation Loan, which is eligibleConsolidation Loan, which is eligible for the interest suspension benefit.50 Colleague Letter GEN-21-03, “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. 46 These loans are those that were in default during the COVID-19 pandemic (regardless ~~for the interest suspension benefit.45~~
~~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~~

~~41 T hese loans are those that were in default during the COVID-19 pandemic (regardless~~ of when a default claim was of when a default claim was
paid) and for which the default waspaid) and for which the default was resolved through rehabilitation or consolidation prior to May 12, 2021. Upon 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 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 ineligiblesuch loans purchased by a third-party lender, it appears that the loans would be ineligible for the 0% interest policy for the 0% interest policy
after the purchase, as they wouldafter the purchase, as they would be FFEL program loans not held by ED. For any suchbe FFEL program loans not held by ED. For any such loans transferred to ED, it loans transferred to ED, it
appears that they would be eligibleappears that they would be eligible for the 0% interest policy after the transfer, as they would befor the 0% interest policy after the transfer, as they would be FFEL program loans FFEL program loans
held by ED. held by ED.
~~42 T he~~47 The cessation of interest accrual (“0% interest policy”) for ED-held loans was originally put into place via 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 administrative action by ED on March 20, 2020. Since then, it has been extended numerous times via administrative
and legislative action. Most recently, on and legislative action. Most recently, on ~~August 6~~December 22, 2021, ED announced , 2021, ED announced ~~a “ final~~an extension extension” of the 0% interest rate of the 0% interest rate
policy to last through policy to last through ~~January 31, 2022. Department of Education, “ Biden~~May 1, 2022. ED, “Biden-Harris Administration Extends Student Loan Pause Administration Extends Student Loan Pause
~~Until January 31~~Through May 1, 2022,” press release, , 2022,” press release, ~~August 6~~December 22, 2021, https://www.ed.gov/news/press-releases/biden-, 2021, https://www.ed.gov/news/press-releases/biden-harris-administration-administration-
extends-studentextends-student -loan-pause--loan-pause-~~until-january-31-2022; and Department of Education~~through-may-1-2022; and ED, Office of Federal Study, Office of Federal Study Aid, COVID-19 Loan Payment Pause and 0% Interest, https://studentaid.gov/announcements-events/covid-19/payment-pause-zero-interest (accessed February 3, 2022) (hereinafter ED, COVID-19 Loan Payment Pause and 0% Interest~~Aid,~~
~~Coronavirus Info for Students, Borrowers, and Parents, https://studentaid.gov/announcements-events/coronavirus~~
(accessed August 12, 2021) (hereinafter ED, Coronavirus Info). For additional information on the history of these ). For additional information on the history of these
actions, see ED, actions, see ED, Waivers and Flexibilities, p. 79862. , p. 79862.
~~43 ED, Coronavirus Info (accessed August 12, 2021).~~
~~44 ED,~~ ~~Waivers~~ 48 ED, COVID-19 Loan Payment Pause and 0% Interest (accessed February 3, 2022). 49 ED, Waivers and Flexibilities, p. 79862, and , p. 79862, and ~~Department of Education~~ED, Office of Postsecondary Education, , Office of Postsecondary Education,
Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVIDElectronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID -19),” -19),”
April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-
guidance-interruptions-study-related-coronavirus-covid-19. At least some IHEs have suspendedguidance-interruptions-study-related-coronavirus-covid-19. At least some IHEs have suspended payments on their payments on their
Perkins Loans in response to COVID-19. See,Perkins Loans in response to COVID-19. See, for example, Danielle Douglas-Gabriel,for example, Danielle Douglas-Gabriel, “ “University of California offers University of California offers
Perkins Loan borrowers relief. Will other colleges follow?” Perkins Loan borrowers relief. Will other colleges follow?” The Washington Post, April 20, 2020. , April 20, 2020.
45 ED, Coronavirus Info ~~(accessed August 12, 2021~~50 ED, COVID-19 Loan Payment Pause and 0% Interest (accessed February 3, 2022). When a borrower consolidates a loan(s) into a Direct ). When a borrower consolidates a loan(s) into a Direct
Consolidation Loan, its proceeds are usedConsolidation Loan, its proceeds are used to pay off the borrower’s previous loans. to pay off the borrower’s previous loans. ~~T he~~The resulting Direct Consolidation resulting Direct Consolidation
Loan is an entirely new loan with potentially different terms and conditions than the underlying loans; thus, benefits Loan is an entirely new loan with potentially different terms and conditions than the underlying loans; thus, benefits
~~uniquely~~ uniquely associated with the underlying loans (e.g., Perkins Loan cancellation benefits) may no longer be available associated with the underlying loans (e.g., Perkins Loan cancellation benefits) may no longer be available
upon consolidation. In addition, progress made towardsupon consolidation. In addition, progress made towards loan forgiveness under the various IDR plans on the underlying loan forgiveness under the various IDR plans on the underlying
loans willloans will not count toward loan forgiveness under an IDR plan on the resulting Direct Consolidation Loan. not count toward loan forgiveness under an IDR plan on the resulting Direct Consolidation Loan.
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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 may temporarily cease making payments on their loans without interest accruing or being subject may temporarily cease making payments on their loans without interest accruing or being subject
~~to capitalization46~~ to capitalization51 when they begin to make payments again at a later point in time. when they begin to make payments again at a later point in time.
Assignment of Certain Defaulted FFEL Program Loans to ED
When an FFEL borrower When an FFEL borrower defaults, the loan holder filesdefaults, the loan holder files a default claim (or insurance claim) with a GA. Upon a default claim (or insurance claim) with a GA. Upon
payment of the claim,payment of the claim, which serveswhich serves as payment for the holder’sas payment for the holder’s ~~losses stemming~~ losses stemming from borrowerfrom borrower default, the holder default, the holder
assigns the defaulted loan to the GA, which in turn files a claimassigns the defaulted loan to the GA, which in turn files a claim with ED for a reinsurance payment. GAs are with ED for a reinsurance payment. GAs are
responsibleresponsible for handling initial col ectionsfor handling initial col ections work on defaulted loans and for administeringwork on defaulted loans and for administering other aspects of the FFEL other aspects of the FFEL
program.program. In certain instances, ED may requireIn certain instances, ED may require GAs to assign defaulted loans to it. Upon assignment,GAs to assign defaulted loans to it. Upon assignment, ED becomes ED becomes
the holder of the defaulted FFEL program loan and becomesthe holder of the defaulted FFEL program loan and becomes ~~responsible~~ responsible for servicing and col ecting on it (via for servicing and col ecting on it (via
contracted loan servicers). contracted loan servicers).
In addition to In addition to ~~recently~~ extending severalextending several of the COVID-19 pandemic student loan reliefof the COVID-19 pandemic student loan relief ~~provisions~~ provisions (cessation of (cessation of
interest accrual and debt col ections)interest accrual and debt col ections) to defaulted GA-held FFEL programto defaulted GA-held FFEL program loans, ED is also requiring that GAs assign loans, ED is also requiring that GAs assign
a a subset of such loans to it. subset of such loans to it. ~~Specifical y, GAs~~ Specifically, GAs are requiredare required to assign to ED defaulted FFEL program loans on which to assign to ED defaulted FFEL program loans on which
the GA pays a default claimthe GA pays a default claim to a FFEL program lender on or after March 13, 2020, and on or prior to the end date 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. of the current student loan payment pause for ED-held loans and that are not subject to an active bankruptcy filing.
Thus, ED wilThus, ED wil become the owner of these loans and wilbecome the owner of these loans and wil become responsiblebecome responsible for servicingfor servicing and col ecting on such and col ecting on such
loans. In addition, these loans willoans. In addition, these loans wil be returned to good standing (i.e.,be returned to good standing (i.e., active repayment status). active repayment status).
Sources: 20 U.S.C. 20 U.S.C. §1078(c)(8); 34 C.F.R. §682.409; and U.S. Department of Education, Office of Postsecondary §1078(c)(8); 34 C.F.R. §682.409; and U.S. Department of Education, Office of Postsecondary
Education, DearEducation, Dear Col eague LetterCol eague Letter, GEN-21-03, “Expansion of Col ections“Expansion of Col ections Pause to Defaulted FFEL Program Loans Managed by Pause to Defaulted FFEL Program Loans Managed by
Guaranty AgenciesGuaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/(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-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, seeagencies-updated-may-24-2021. For additional information on FFEL program administration and GAs, see ~~CRS~~
CRS Report R46409, 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 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 Congress have taken further steps to enable borrowers to temporarily cease making payments on
their qualifying loans. their qualifying loans.
For March 13, 2020, through For March 13, 2020, through ~~January 31~~May 1, 2022, ED-held student loans (e.g., , 2022, ED-held student loans (e.g., al all Direct Loan Direct Loan
program loans, and FFEL and Perkins Loan program loans held by ED) and defaulted GA-held 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)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~~ 52 will have 51 ED has indicated that any balance of unpaid interest on a borrower’s loan before March 13, 2020, will not be capitalized when the COVID-19 payment suspension (discussed later in this report) ends and through November 2, 2022, unless the borrower consolidates their loan. This policy differs from ED’s previous policy under which a balance of unpaid interest on a borrower’s loan before March 13, 2020, was capitalized in a larger set of instances. ED indicates that it has asked loan servicers to undo any interest capitalization that has an effective date after March 13, 2020. For additional information, seeMarch 13, 2020. For additional information, see ED, Coronavirus Info
~~(accessed August 12, 2021).~~
47 ED, COVID-19 Loan Payment Pause and 0% Interest (accessed February 3, 2022). 52 On March 30, 2021, ED announced that FFEL program loans On March 30, 2021, ED announced that FFEL program loans ~~t hat~~that defaulted on or after March 13, 2020, would be defaulted on or after March 13, 2020, would be
returned to good standing. Becausereturned to good standing. Because ~~such~~ such loans have been returned to good standing and are now held by ED, the 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; COVID-19 monthly payment suspension that applies to ED-held loans now applies to these loans; ~~t hus~~thus, such, such borrowers borrowers
are not required to make monthly payments on their loans. are not required to make monthly payments on their loans. ~~U.S. Department of Education~~ED “Department of Education “Department of Education
Announces Expansion of COVID-19 Emergency FlexibilitiesAnnounces Expansion of COVID-19 Emergency Flexibilities to Additional Federalto Additional Federal Student Loans in Default,” press Student Loans in Default,” press
release, March 30, 2021, https://www.ed.gov/news/press-releases/departmentrelease, March 30, 2021, https://www.ed.gov/news/press-releases/department -education-announces-expansion-covid--education-announces-expansion-covid-
19-emergency-flexibilities-additional-federal-student19-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~~-loans-default; ED, COVID-19 Loan Payment Pause and 0% Interest (accessed February 3, 2022). ).
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their monthly payments suspended. (In practice, ED is placing all such loans in administrative forbearance. 53) During this time, borrowers will not be required to make payments due on their loans.due on their loans.4954 Borrowers who are eligible for this benefit need not apply for it; ED Borrowers who are eligible for this benefit need not apply for it; ED ~~wil~~
~~automatical y~~ is to automatically suspend payments. suspend 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 ~~January 31~~May 1, 2022, can be refunded to the , 2022, 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.50
55 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.5156 Borrowers who are ineligible for this benefit because their Borrowers who are ineligible for this benefit because their
FFEL program lender or Perkins Loan program IHE is not providing it may take advantage of the FFEL program lender or Perkins Loan program IHE is not providing it may take advantage 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~~
~~required to qualify for PSLF, and are not included in a borrower’s repayment period53 (e.g.,~~

4957 In addition, ED has 53 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). 54 On March 20, 2020, ED announced it had directed all federal student loan servicers to grant a 60-day administrative 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 requestedforbearance (beginning March 13, 2020) to any borrower of an ED-held student loan who requested one. In addition, one. In addition,
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 whoheld loan who is more than 31 days delinquentis more than 31 days delinquent on his or her loans as of March 13, 2020, or who becomes 31 days on his or her loans as of March 13, 2020, or who becomes 31 days
delinquent thereafter. delinquent thereafter. ~~U.S. Department of Education~~(ED, “Delivering on President , “Delivering on President ~~T rump~~Trump’s Promise, Secretary DeVos ’s Promise, Secretary DeVos
~~Suspends Federal Student~~ Suspends 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-~~
~~student-loan-payments-waives-interest-during-national-emergency.~~2020.) Subsequently, the Subsequently, the ~~CARES~~ CARES Act wasAct was enacted, which enacted, which
~~required~~ required that ED automatically suspend all payments on Direct Loans and ED-held FFEL program loans through that ED automatically suspend all payments on Direct Loans and ED-held FFEL program loans through
September 30, 2020. While the CARESSeptember 30, 2020. While the CARES Act didAct did not provide for a suspension of payments on EDnot provide for a suspension of payments on ED -held Perkins Loan -held Perkins Loan
program loans, ED has applied a similar suspension to such loans. program loans, ED has applied a similar suspension to such loans. (ED, ~~ED,~~ Waivers and Flexibilities, p. 79857., p. 79857.)
Subsequently,Subsequently, the Administration the Administration ~~ext ended~~extended the payment suspension on numerous occasions. the payment suspension on numerous occasions. ~~Most~~ Most recently, on recently, on ~~August~~
6December 22, 2021, ED announced , 2021, ED announced ~~a “final~~an extension extension” of the payment suspension to last through of the payment suspension to last through ~~January 31, 2022. Department of~~
~~Education, “ Biden~~May 1, 2022. (ED, “Biden-Harris Administration Extends Student Loan Pause Administration Extends Student Loan Pause ~~Until January 31~~Through May 1, 2022,, 2022, ” press release, ” press release, ~~August 6~~December 22, 2021, , 2021,
https://www.ed.gov/news/press-releases/biden-https://www.ed.gov/news/press-releases/biden-harris-administration-extends-student-loan-pause-administration-extends-student-loan-pause-~~until-january-31-2022.~~ through-may-1-2022.) (For For
additional information on the history of these actions, see ED, additional information on the history of these actions, see ED, Waivers and Flexibilities,, p. 79862.p. 79862.) 55 ED, COVID-19 Loan Payment Pause and 0% Interest (accessed February 3, 2022
50 ED, Coronavirus Info ~~(accessed August 12, 2021~~). It appears that borrowers of non-ED-held FFEL program loans ). It appears that borrowers of non-ED-held FFEL program loans
who made voluntary payments during the payment suspension period, subsequentlywho made voluntary payments during the payment suspension period, subsequently defaulted on their loans duringdefaulted on their loans during the the
payment suspension period, and had their loans returned to good standing by the Administration wouldpayment suspension period, and had their loans returned to good standing by the Administration would qualify for a qualify for a
refund of their voluntary payments, even though at the time the payment(s) was made, their loans didrefund of their voluntary payments, even though at the time the payment(s) was made, their loans did not qualify for the not qualify for the
COVID-19 payment suspension. COVID-19 payment suspension.
51 56 ED, ED, Waivers and Flexibilities, p. 79862, and , p. 79862, and ~~Department of Education~~ED, Office of Postsecondary Education, , Office of Postsecondary Education,
Electronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVIDElectronic Announcement, “UPDATED Guidance for interruptions of study related to Coronavirus (COVID -19),” -19),”
April 3, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-April 3, 2020, https://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 guidance-interruptions-study-related-coronavirus-covid-19. Some commercial FFEL program loan holders have
voluntarily provided borrowers with additional forbearance options in response to the COVIDvoluntarily provided borrowers with additional forbearance options in response to the COVID -19 pandemic. See, for -19 pandemic. See, for
example, Marie Albiges,example, Marie Albiges, “Virginia offers temporary relief on some private loans during coronavirus,“Virginia offers temporary relief on some private loans during coronavirus, ” ” The Virginian-
Pilot, April 30, 2020. Some IHEs have suspended, April 30, 2020. Some IHEs have suspended payments on their Perkins Loans in response to COVIDpayments on their Perkins Loans in response to COVID -19. See,-19. See, for for
example, Danielle Douglas-Gabriel,example, Danielle Douglas-Gabriel, “ “University of California offers Perkins Loan borrowers relief. Will other colleges University of California offers Perkins Loan borrowers relief. Will other colleges
follow?”, follow?”, The Washington Post, April 20, 2020. , April 20, 2020.
5257 When a borrower consolidates a loan(s) into a Direct Consolidation Loan, its proceeds are used When a borrower consolidates a loan(s) into a Direct Consolidation Loan, its proceeds are used to pay off the to pay off the
borrower’s previous loans. borrower’s previous loans. ~~T he~~The resulting Direct Consolidation Loan is an entirely new loan with resulting Direct Consolidation Loan is an entirely new loan with ~~potentia lly~~potentially different different
terms and conditions than the underlying loans; thus, benefits uniquelyterms and conditions than the underlying loans; thus, benefits uniquely associated with the underlying loans (e.g., associated with the underlying loans (e.g.,
Perkins Loan cancellation benefits) may no longer be available upon consolidation. In addition, progress made towards 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 willloan forgiveness under the various IDR plans on the underlying loans will not count toward loan forgiveness undernot count toward loan forgiveness under an an
IDR plan on the resulting Direct Consolidation Loan. 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~~.
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~~Federal Student Loan Debt Relief in the Context of COVID-19~~

Congressional Research Service 11 Federal Student Loan Debt Relief in the Context of COVID-19 waived the three-year (36 month) cumulative forbearance limit for Perkins Loan borrowers, regardless of whether the loans are held by ED or an IHE.58 Generally, 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 period59 (e.g., periods of unemployment deferment do not count toward the maximum repayment periods of 20 periods of unemployment deferment do not count toward the maximum repayment periods of 20
or 25 years under the IDR plans). However, for Direct Loan borrowers (the only borrowers or 25 years under the IDR plans). However, for Direct Loan borrowers (the only borrowers
eligibleeligible for PSLF), suspended payments that would have been made during the special for PSLF), suspended payments that would have been made during the special
administrative forbearance administrative forbearance ~~wil~~ will count toward the 120 monthly payments required to qualify for count toward the 120 monthly payments required to qualify for
PSLF if the borrower works full-time in qualifying employment during the suspension.PSLF if the borrower works full-time in qualifying employment during the suspension.54
60 For borrowers whose loans qualify for the payment suspension, the suspended payments For borrowers whose loans qualify for the payment suspension, the suspended payments ~~wil~~ will also also
count toward the 20- and 25-year repayment periods under the IDR plans. Suspended payments count toward the 20- and 25-year repayment periods under the IDR plans. Suspended payments
~~wil~~ will also count toward the nine voluntary payments within 10 consecutive months required for also count toward the nine voluntary payments within 10 consecutive months required for
~~individuals to rehabilitate55~~individuals to rehabilitate61 their defaulted loans, but only if those suspended payments occurred their defaulted loans, but only if those suspended payments occurred
after a borrower entered into a rehabilitation agreement with ED.after a borrower entered into a rehabilitation agreement with ED.5662 ED has stated that for ED has stated that for
defaulted GA-held FFEL program loan borrowers who have entered into a rehabilitation 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, agreement, “months following entry into the agreement in which payments are not required,
made, or made and then refunded per a borrower request made, or made and then refunded per a borrower request ~~wil be automatical y~~will be automatically counted as a counted as a
payment toward the required nine payments within 10 months.”payment toward the required nine payments within 10 months.”5763 It is unclear whether suspended It is unclear whether suspended
payments on non ED-held FFEL program loans whose lender has authorized this special 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 periods under 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 an IHE, are applicable IDR plans. Perkins Loans, regardless of whether they are held by ED or an IHE, are
~~ineligible~~ ineligible for IDR plans. for IDR plans.
~~In addition,~~ ED has authorized institutions that hold Perkins Loans to grant a forbearance to 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.~~
~~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~~
~~Perkins Loan borrower.58 This flexibility is available through the end of an IHE’s payment period~~
~~that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end~~
~~date for the Federal y-declared emergency related to COVID-19.”59~~

~~54 Similarly, suspended payments that would have been made during~~ three months, 58 ED, Office of Postsecondary Education, Electronic Announcement CB-22-03, “Waiver of the Three-year Cumulative Limit on Forbearances for Federal Perkins Loan borrowers,” January 22, 2022, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2022-01-13/waiver-three-year-cumulative-limit-forbearances-federal-perkins-loan-borrowers. 59 Similarly, periods of deferment and forbearance do not count toward the 120 monthly payments required to qualify for TEPSLF. For additional information on PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program: Selected Issues. 60 Similarly, suspended payments that would have been made during the special administrative forbearance will count the special administrative forbearance will count
toward the 120 monthly payments required to qualify for toward the 120 monthly payments required to qualify for ~~T EPSLF~~TEPSLF. ED,. ED, Waivers and Flexibilities, p. 79863; , p. 79863;
~~Department of Education~~ED, Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for , 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/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 library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19; and
~~ED, Coronavirus Info (accessed August 12, 2021).~~
55ED, Office of Federal Study Aid, “6 Things to Know About Public Service Loan Forgiveness During COVID-19,” https://studentaid.gov/articles/6-things-to-know-about-pslf-during-coronavirus/ (accessed February 3, 2022). 61 Loan rehabilitation is the process by which a borrower may bring Loan rehabilitation is the process by which a borrower may bring a loan out of default by adheringa loan out of default by adhering to specified to specified
repayment requirements. 34 C.F.R. §§674.39, 682.405, 685.211(f). repayment requirements. 34 C.F.R. §§674.39, 682.405, 685.211(f).
5662 If a borrower was If a borrower was not in a rehabilitation agreement prior to the start of the paused payments, he or she may enter into not in a rehabilitation agreement prior to the start of the paused payments, he or she may enter into
one and any suspendedone and any suspended payments following entry into the rehabilitation agreement will count toward rehabilitation. payments following entry into the rehabilitation agreement will count toward rehabilitation.
ED, ED, Coronavirus Info (accessed August 13, 2021).
~~57 U.S. Department of Education~~Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-events/covid-19/default (accessed February 3, 2022). 63 ED, Office of Postsecondary Education, Dear Colleague Letter, Office of Postsecondary Education, Dear Colleague Letter GEN-21-03, “Expansion of Collections , “Expansion of Collections
Pause to Defaulted FFEL Program Loans Managed by Guaranty AgenciesPause to Defaulted FFEL Program Loans Managed by Guaranty Agencies (Updated May 24, 2021),(Updated May 24, 2021),” May 12, 2021, May 12, 2021,
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-05-12/expansion-collections-pause-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 “defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-2021. See the “ Collection on Defaulted Collection on Defaulted
Loans” section for additional information on refunds of payments made on defaulted GA-heldLoans” 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~~
FFEL Program loans. Congressional Research Service 12 Federal Student Loan Debt Relief in the Context of COVID-19 but it may be extended upon a borrower providing supporting documentation. Borrowers must request the forbearance from the IHE. This period of forbearance is excluded from the three-year cumulative forbearance limit for Perkins Loan borrowers.64 These flexibilities are available through the end of the IHE’s payment period65 “that includes the end date for the Federally-declared emergency related to COVID-19.”66
Income-Driven Repayment Recertification
As previously described, borrowers As previously described, borrowers ~~enrol ed~~enrolled in an IDR plan must in an IDR plan must ~~annual y~~annually provide provide
documentation of their income and family size to remain eligibledocumentation of their income and family size to remain eligible for IDR repayment (referred to as recertification).67 Typically, an individual certifies their income by providing documentation of their taxable income, which may include providing ED with a paystub or federal income tax return information data from the Internal Revenue Service; borrowers self-certify their family size. ED has waived the requirement that a borrower annually recertify their income and family size through at least November 2022.68Borrowers~~for IDR repayment (referred to~~
~~as recertification).60 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.”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~~
may voluntarily recertify their income during recertify their income during the payment suspension. Finally, through July 31, 2022, ED is permitting borrowers to self-report their income, without providing tax documentation, when applying for or recertifying their IDR plan.69 64 ED, 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, Office of Postsecondary Education, Electronic Announcement CB-22-03, “Waiver of the Three-year Cumulative Limit on Forbearances for Federal Perkins Loan Borrowers,” January 13, 2022, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2022-01-13/waiver-three-year-cumulative-limit-forbearances-federal-perkins-loan-borrowers. 65 A payment period is the period for which a Title IV student aid disbursement must be made. Payment periods differ by IHE and may also differ by educational programs within IHEs, based on a variety of criteria including whether an educational program is measured in clock- or credit-hours and the type of term (e.g., semester, trimester, quarter) the educational program uses. For additional information, see 34 C.F.R. Section 668.4. 66 ED, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to Coronavirus (COVID-19),” August 21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. See also, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-04-03/updated-guidance-interruptions-study-related-coronavirus-covid-19, and ED, Office of Postsecondary Education, Electronic Announcement CB-22-03, “Waiver of the Three-year Cumulative Limit on Forbearances for Federal Perkins Loan Borrowers,” January 13, 2022, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2022-01-13/waiver-three-year-cumulative-limit-forbearances-federal-perkins-loan-borrowers. 67 If a borrower fails to recertify their income under an IDR plan, the consequences vary depending ~~the payment suspension.62~~
~~Loan Default and Collections~~
~~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~~
~~unpaid balance of principal and interest becomes due in full).63 In addition, the borrower loses~~
~~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~~
~~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~~
~~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~~
~~voluntary debt resolution attempts do not succeed, involuntary collection practices may be~~
~~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 on the plan. In
general, a borrower’s monthly repayment will be recalculated in a manner that is not based on their income. Under 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 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 capitalized. Under all of the IDR plans, if ~~borrowers~~ a borrower fails to recertify their family size, they will fails to recertify their family size, they will ~~rem ain~~remain in their chosen in their chosen
IDR plan, but a family sizeIDR plan, but a family size of one willof one will ~~be assumed~~ be assumed for them. If a borrower’sfor them. If a borrower’s actual family sizeactual family size is larger than one, but a is larger than one, but a
loan servicer assumedloan servicer assumed a family size of one duea family size of one due to the borrower’s failure to recertify, his or her monthly payments may to the borrower’s failure to recertify, his or her monthly payments may
increase under some IDR plans or he or she may lose eligibilityincrease under some IDR plans or he or she may lose eligibility to make payments based on income. to make payments based on income. ~~U.S. Department~~
~~of Education~~ED, Office of , Office of ~~Federal~~ Federal Student Aid, “What Student Aid, “What ~~happens~~will happen if I don’t recertify my income and family size by the if I don’t recertify my income and family size by the
annual deadline?”,annual deadline?”, https://studentaid.gov/manage-loans/repayment/plans/income-driven#fail-to-recertify (accessed 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 withheld on or after March 13, 2020, and through January 31, 2022, wil~~
~~have any offset portion returned to them. Borrowers whose wages were garnished on or after~~
~~March 13, 2020, and January 31, 2022, wil have their wages refunded. 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~~
~~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-19.69 This flexibility is available~~
~~through the end of an IHE’s payment period that includes December 31, 2020, or the end of the~~
~~IHE’s payment period “that includes the end date for the Federal y-declared emergency related to~~
~~COVID-19.”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~~ February 3, 2022). 68 As of February 3, 2022, ED had indicated that if a borrower’s recertification date is before November 2022, it will be “pushed out by one year.” ED, Office of Federal Student Aid, “COVID-19 Relief: Income-Drive[n] Repayment Plans,” https://studentaid.gov/announcements-events/covid-19/income-driven-repayment#when-to-recertify (accessed February 4, 2022). 69 ED, Office of Federal Student Aid, “COVID-19 Relief: Income-Drive[n] Repayment Plans,” https://studentaid.gov/announcements-events/covid-19/income-driven-repayment#when-to-recertify (accessed February 4, 2022). Congressional Research Service 13 Federal Student Loan Debt Relief in the Context of COVID-19 Loan Default and Collections 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 unpaid balance of principal and interest becomes due in full).70 In addition, the borrower loses eligibility for certain borrower benefits (e.g., deferment, loan forgiveness), as well as eligibility to receive additional Title IV federal student aid. A defaulted borrower’s student loan account may be transferred to ED’s Default Resolution Group (DRG)71in the case of ED-held loans, or a GA in the case of non-ED-held FFEL program loans, that will contact 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 voluntary debt resolution attempts do not succeed, involuntary collections practices may be utilized, which include administrative wage garnishment; offset of federal income tax returns, Social Security benefits, and certain other federal benefits; and civil litigation.72 Collections of Defaulted Loans For March 13, 2020, through May 1, 2022, ED will halt the above-described involuntary debt collections practices, and the DRG and GAs will not engage in proactive collections activities (i.e., will not make collection calls and send letters or billing statements to defaulted borrowers) for all ED-held student loans (i.e., all Direct Loan program loans, and FFEL and Perkins Loan program loans held by ED) and defaulted GA-held FFEL program loans,73 respectively.74 However, borrowers may contact the DRG and GAs to continue repayment arrangements they 70 34 C.F.R. §§674.31(b)(5), 6823411(f), 685.211(d). 71 Previously, ED contracted with several private collection agencies (PCAs) to perform loan collections activities when a borrower defaulted on their ED-held loan. On November 8, 2021, ED announced it had cancelled its contracts with the PCAs and recalled all borrower accounts. ED’s Default Resolution Group is now responsible for assisting borrowers of defaulted ED-held loans. ED, Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-events/covid-19/default (accessed February 4, 2022). 72 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. 73 The policy to pause collections 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 policy would apply retroactively to March 13, 2020. ED “Department of Education Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press release, March 30, 2021, Student Loans in Default,” press release, March 30, 2021,
https://www.ed.gov/news/press-releases/departmenthttps://www.ed.gov/news/press-releases/department -education-announces-expansion-covid-19-emergency-flexibilities--education-announces-expansion-covid-19-emergency-flexibilities-
additional-federal-studentadditional-federal-student -loans-default; -loans-default; and ED~~and U.S. Department of Education~~, Office of Postsecondary Education, Dear , Office of Postsecondary Education, Dear
~~Colleague Letter~~Colleague Letter GEN-21-03, “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed, “Expansion of Collections Pause to Defaulted FFEL Program Loans Managed by Guaranty Agencies by Guaranty Agencies
(Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/(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-24-2021-05-12/expansion-collections-pause-defaulted-ffel-program-loans-managed-guaranty-agencies-updated-may-24-
2021. 2021.
~~66 T his~~74 This policy was policy was originally put into place via administrative action by ED on March 25, originally put into place via administrative action by ED on March 25, ~~202 0. U.S. Department of~~
~~Education~~2020. (ED, “Secretary DeVos, “Secretary DeVos Directs FSADirects FSA to Stop Wage Garnishment, Collections Actions for Student Loan to Stop Wage Garnishment, Collections Actions for Student Loan
Borrowers, Will RefundBorrowers, Will Refund More More ~~T han~~ Than $1.8 Billion to Students, Families,”$1.8 Billion to Students, Families,” press release, March 25, 2020.)~~press release, March 25, 2020,~~
~~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 Since then, it has been extended numerous times
via administrative and legislative action. Mostvia administrative and legislative action. Most recently, on recently, on ~~August 6~~December 22, 2021, ED announced , 2021, ED announced ~~a “ final~~an extension extension” of the of the
collection suspension to last through collection suspension to last through ~~January 31, 2022. Department of Education, “ Biden~~May 1, 2022. (ED, “Biden-Harris Administration Extends Administration Extends
Student Loan Pause Student Loan Pause ~~Until January 31~~Through May 1, 2022,” press release, , 2022,” press release, ~~August 6~~December 22, 2021, https://www.ed.gov/news/press-releases/, 2021, https://www.ed.gov/news/press-releases/
biden-biden-harris-administration-extends-studentadministration-extends-student -loan-pause--loan-pause-~~until-january-31~~through-may-1-2022; and ED, -2022; and ED, ~~Coronavirus Info~~ ~~(accessed~~ COVID-19 Loan Payment Pause and 0% Interest (accessed August August
13, 2021)13, 2021)). (. 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. 79856., p. 79856.) Congressional Research Service 14 Federal Student Loan Debt Relief in the Context of COVID-19 had made prior to implementation of this policy, to enter into a loan rehabilitation arrangement or to consolidate their loans out of default.75 Borrowers of ED-held loans and defaulted GA-held loans whose federal tax refund or Social Security benefits were withheld on or after March 13, 2020, and through May 1, 2022, will have any offset portion returned to them. Borrowers whose wages were garnished on or after March 13, 2020, and May 1, 2022, will have their wages refunded. Finally, borrowers of defaulted GA-held FFEL program loans who made voluntary payments on or after March 13, 2020, and through May 1, 2022, may request a refund for those payments.76 In addition, ED has authorized institutions to stop collections activities on defaulted Perkins Loans 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-19.77 This flexibility is available through the end of an IHE’s payment period that includes December 31, 2020, or the end of the IHE’s payment period “that includes the end date for the Federally-declared emergency related to COVID-19,” whichever is later.78
~~67 ED, Coronavirus Info (accessed August 13, 2021).~~
~~68 ED, Coronavirus Info (accessed August 13, 2021).~~
~~69 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.~~
~~70 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/~~
~~library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19.~~
~~Congressional Research Service~~
14

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

Satisfactory Repayment Arrangements, Loan Rehabilitation, and
Consolidation Out of Default
To regain Title IV student aid eligibility, To regain Title IV student aid eligibility, a defaulted federal student loan borrower must make six a defaulted federal student loan borrower must make six
on-time, voluntary monthly payments on a defaulted loan.on-time, voluntary monthly payments on a defaulted loan.7179 In addition, loan rehabilitation In addition, loan rehabilitation offers 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 Loan program, borrowers must make nine on-time payments according to ~~general y~~generally applicable applicable
procedures.procedures.7280 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
eligibleeligible to do so, a borrower must make three consecutive, on-time, full monthly payments on a to do so, a borrower must make three consecutive, on-time, full monthly payments on a
defaulted loan.defaulted loan.73
81 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 eligibilityfails to make any of the consecutive monthly payments required to re-establish eligibility for Title for Title
IV federal student aid, to rehabilitateIV federal student aid, to rehabilitate such defaulted loans, or to consolidate such defaulted loans such defaulted loans, or to consolidate such defaulted loans
out of default, the borrower out of default, the borrower ~~shal~~ shall not be considered to have missed any of those payments. This is not be considered to have missed any of those payments. This is
a temporary flexibility that is availablea temporary flexibility that is available in response to the COVID-19 pandemic.in response to the COVID-19 pandemic.74
82 75 ED, Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-events/covid-19/default (accessed February 4, 2022). 76 ED, Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-events/covid-19/default (accessed February 4, 2022). 77 ED, 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. 78 ED, Office of Postsecondary Education, Electronic Announcement, “Updated deadlines for flexibilities related to Coronavirus (COVID-19)”, August 21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. 79 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b). 80 34. C.F.R. §§674.39, 682.405, 685.211(f). 81 34 C.F.R. §685.102(b). 82 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 Congressional Research Service 15 Federal Student Loan Debt Relief in the Context of COVID-19 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).7583
ED has announced that through at least January 31, 2021, it would ensure that any payment that ED has announced that through at least January 31, 2021, it would ensure that any payment that
has been suspended under the special administrative forbearance described above has been suspended under the special administrative forbearance described above ~~shal~~ shall be 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.borrower.7684 In addition, GAs that hold defaulted FFEL program loans for which a default claim 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 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~~
~~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,~~
ED-held loans are to request that consumer reporting agencies delete the record of default from the borrower’s credit report.85 Public Service Loan Forgiveness The PSLF program provides Direct Loan borrowers who, on or after October 1, 2007, are employed full-time in certain public service jobs for 10 years while concurrently making 120 qualifying monthly payments on their loans with the opportunity to have any remaining balance of the principal and interest on their Direct Loans forgiven.86 Qualifying payments are separate monthly payments (i.e., not greater than the required monthly payment) that are on-time (within 15 days of the scheduled due date), in full, scheduled (i.e., made when required, not during periods of deferment or forbearance), and made under a qualifying repayment plan (in most cases, an income-driven repayment plan). Payments made on any loans prior to consolidation do not count toward the required 120 payments. Periods of service performed to receive benefits under the Teacher Loan Forgiveness program87 may not be counted toward PSLF qualifying employment. A borrower must be employed full-time in qualifying public service at the time he or she applies for and receives forgiveness. “that includes the end date for the Federally-declared emergency related to COVID-19.” ED, 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)Coronavirus (COVID-19)~~”, August~~ ,” August 21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-21, 2020, https://fsapartners.ed.gov/knowledge-center/library/electronic-
announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. Other guidance states this announcements/2020-08-21/updated-deadlines-flexibilities-related-coronavirus-covid-19. Other guidance states this
policy is effective (at least for Perkins Loans) through December 30, 2020. ED, policy is effective (at least for Perkins Loans) through December 30, 2020. ED, Waivers and Flexibilities, p. 79862. It , p. 79862. It
is unclear whether the administrative action to extend other forms of COVID-19 student loan relief through is unclear whether the administrative action to extend other forms of COVID-19 student loan relief through ~~January 31,~~
May 1, 2022, also applies to these flexibilities. 2022, also applies to these flexibilities.
75 83 See, See, for example, for example, ~~U.S. Department of Education~~ED, “Master Promissory Note: Direct Subsidized, “Master Promissory Note: Direct Subsidized Loans and Direct Loans and Direct
~~Unsubsidized~~ Unsubsidized Loans, William Loans, William D. Ford Federal Direct Loan Program,” OMB No. 1845D. Ford Federal Direct Loan Program,” OMB No. 1845 -0007, https://studentaid.gov/app/-0007, https://studentaid.gov/app/
~~subUnsubHT MLPreview.action.~~
~~76 U.S. Department of Education~~subUnsubHTMLPreview.action. 84 ED, “Federal Student Aid Programs (Student Assistance General, “Federal Student Aid Programs (Student Assistance General Provisions, Federal Provisions, Federal
Perkins Loan Program, William D. Ford FederalPerkins Loan Program, William D. Ford Federal Direct Loan Program, and Federal-Work StudyDirect Loan Program, and Federal-Work Study Programs,” 86Programs,” 86 Federal
Register 5008, January 19, 2021. ED guidance 5008, January 19, 2021. ED guidance ~~does~~ does not indicate how the newly extended suspendednot indicate how the newly extended suspended loan payments loan payments
(payments suspended through (payments suspended through ~~January 31~~May 1, 2022) will be, 2022) will be reported to consumer reporting agencies. 85 ED, Office of Postsecondary Education, Dear Colleague Letter GEN-21-03, “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. 86 For additional information, see CRS Report R45389, The Public Service Loan Forgiveness Program: Selected Issues. 87 For additional information on the Teacher Loan Forgiveness program, see CRS Report R43571, Federal Student Loan Forgiveness and Loan Repayment Programs. ~~reported to consumer reporting agencies.~~
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~~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~~
~~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.~~
~~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~~
~~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~~
~~performed before, during, and after the qualifying emergency.80~~
~~Borrower Defense to Repayment~~
~~In certain circumstances, borrowers may seek discharge of their Title IV student loans by~~
~~asserting as a borrower defense to repayment (BDR) certain acts or omission of an IHE, if the~~
~~cause of action directly relates to the loan or educational services for which the loan was~~
~~provided. Although statutory language specifies BDR as an available discharge option only for~~
~~Direct Loan borrowers,81 FFEL and Perkins Loan program borrowers may consolidate their loans~~
~~into a Direct Loan program Consolidation Loan to pursue BDR discharge.82 Three different~~
~~standards for evaluating BDR discharge may be applied to eligible student loans. The applicable~~
~~BDR standards to be used largely depend on when the Direct Loan was made. For Direct~~
~~Consolidation Loans made on or after July 1, 2020, the standard applicable to loans made on or~~
~~after July 1, 2020, applies.~~
~~ED has stated that FFEL and Perkins Loan program borrowers who submitted a BDR application~~
~~prior to July 1, 2020, and who would need to consolidate those loans into a Direct Consolidation~~
~~Loan to receive BDR relief, wil have their BDR eligibility evaluated by the standards for Direct~~
~~Consolidation Loans disbursed between July 1, 2017, and July 1, 2020.83~~

~~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,~~ ~~The Closure of Institutions of Higher~~
~~Education: Student Options, Borrower Relief, and Other Im plications~~.
~~82 34 C.F.R. §685.212(k)(2).~~
~~83 ED, Waivers and Flexibilities, p. 79863. Some view the BDR standards for loans disbursed between July 1, 2017,~~
~~and July 1, 2020, to be more beneficial to borrowers than the standards that apply to loans made on or after July 1,~~
~~2020. See, for example, Letter from AFL-CIO, AFSCME, and Allied Progress, et al. to Senator Dick Durbin and~~
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~~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 on T PD discharge, see CRS Report R45931,~~ ~~Federal Student Loans Made Through the~~
~~William D. Ford Federal Direct Loan Program : Term s and Conditions for Borrowers~~.
86In October 2021, in response to the COVID-19 emergency, ED announced a series of limited-time waivers of numerous PSLF program rules88 to enable borrowers to receive credit for past periods of repayment that would not otherwise qualify for PSLF.89 In general, “any prior period of repayment will count as a qualifying payment, regardless of loan program, repayment plan, or whether the payment was made in full or on time,” so long as the borrower met the requisite public service employment requirements during those periods of repayment. Through October 31, 2022, borrowers may receive PSLF payment credit for the following:90  Periods of repayment91 on Direct Loan program, FFEL program, Perkins Loan program, and other older HEA authorized program loans (e.g., National Defense Student Loans).92 Borrowers must consolidate their loan(s) into a Direct Loan program loan by October 31, 2022, to receive payment credit.  Periods of repayment, even if payments were made according to a nonqualifying repayment plan, made late, or made for less than the amount due.  Periods of repayment on loans before consolidation, even if payments were made according to a nonqualifying repayment plan, made late, or made for less than the amount due.  Periods of military service deferment or active military state duty or military mobilization forbearance.  Periods of COVID-19 pandemic-related deferment or forbearance between March 20, 2020, and April 30, 2022, for borrowers with FFEL program loans held by private lenders and Perkins Loan program loans held by IHEs.93 In addition, through October 31, 2022, ED is waiving the requirement that a borrower be employed full-time in qualifying public service at the time of application for and forgiveness under PSLF. ED has waived the prohibition against periods of service performed to receive benefits under the Teacher Loan Forgiveness program counting toward periods of PSLF qualifying employment.94 88 These waivers also apply to TEPSLF. ED, Office of Federal Student Aid, “PSLF Waiver Offers Way to Get Closer to Loan Forgiveness,” https://studentaid.gov/announcements-events/pslf-limited-waiver (accessed February 7, 2022) (hereinafter ED, PSLF Waivers), 89 ED, “U.S. Department of Education Announces Transformational Changes to the Public Service Loan Forgiveness Program, Will Put Over 550,000 Public Service Workers Closer to Loan Forgiveness,” press release, October 6, 2021, https://www.ed.gov/news/press-releases/us-department-education-announces-transformational-changes-public-service-loan-forgiveness-program-will-put-over-550000-public-service-workers-closer-loan-forgiveness. 90 ED, PSLF Waivers. 91 ED has indicated that a “period of repayment” is a calendar month during which a borrower is “in repayment” status (i.e., not in default, deferment, or forbearance) on their loan. ED PSLF Waivers (accessed February 7, 2022). 92 According to ED, borrowers of Health Education Assistance Loans (HEAL; previously made under the Public Health Service Act) may also receive PSLF payment credit, but only if they first consolidate those loans with Direct Loan program, FFEL program, Perkins Loan program, or older HEA program loans. It appears that such borrowers would only receive payment credits on the HEAL program loan for repayment and employment periods associated with payment periods of their HEA loans. For example, if a borrower, while employed in a PSLF qualifying job, was in repayment status for 100 payment periods on their HEAL program loan and 60 payment periods on a Direct Loan program Unsubsidized Loan and then consolidated those two loans into a Direct Consolidation Loan before October 31, 2022, it appears that the borrower would receive credit for 60 payment periods on the new Direct Consolidation Loan. CRS email communication with ED, January 6, 2022. 93 CRS email communication with ED, January 7, 2022. 94 ED, PSLF Waivers. Congressional Research Service 17 Federal Student Loan Debt Relief in the Context of COVID-19 For borrowers with Direct Consolidation Loans (regardless of whether the loan repaid Direct Loan program, FFEL program, Perkins Loan program, or other older HEA program loans), if the underlying loans had differing numbers of qualifying payments, ED is to credit the entire Direct Consolidation Loan with the largest number of qualifying payment periods of the loans that were consolidated. For example, if a borrower had 50 qualifying payment periods on one FFEL program Subsidized Stafford Loan and 100 qualifying payment periods on a second FFEL program Subsidized Stafford Loan and consolidated those two loans into a Direct Consolidation Loan, the borrower would receive credit for 100 PSLF qualifying payments on the new Direct Consolidation Loan.95 Borrowers who have Direct Loan program loans and have previously submitted a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF form)96 are to automatically receive credit for prior repayment periods during which their employment was determined to be PSLF qualifying. Such borrowers may need to submit additional PSLF forms to document periods of employment they had not previously documented with ED to receive credit for associated payment periods. Borrowers who have Direct Loans but have not previously submitted a PSLF form must submit a PSLF form by October 31, 2022, to receive PSLF payment credits.97 Borrowers with one or more FFEL program, Perkins Loan program, or older HEA loan program loans must apply for a Direct Consolidation Loan by October 31, 2022.98 After the consolidation is complete, they must submit a PSLF form documenting all periods of qualifying public service employment for which they wish to receive PSLF payment credit. ED is to then determine the number of PSLF payment credits they will receive on the new Direct Consolidation Loan.99 Borrowers who, with the application of the PSLF payment credits, have made more than 120 payments on an existing Direct Loan are to automatically receive a refund for the payments made in excess of those 120 payments. Borrowers cannot receive refunds for payments in excess of 120 payments on loans underlying a Direct Consolidation Loan, including Direct Loans that were themselves consolidated into a Direct Consolidation Loan.100 Borrowers who previously received 95 Parent PLUS Loans on their own, or consolidated with no other type of loan, are ineligible to receive additional months of qualifying payments under the PSLF waivers. However, if a borrower consolidates (or had previously consolidated) a Parent PLUS Loan with other types of loans (e.g., a FFEL program Subsidized Stafford Loan), he or she can receive credit for PSLF qualifying payments on the consolidation loan based on his or her “repayment activity for the non-Parent PLUS Loan.” For example, if a borrower, while employed in a PSLF-qualifying job, was in repayment status for 36 payment periods on a FFEL program Parent PLUS Loan and 60 payment periods on a FFEL program Subsidized Stafford Loan and then consolidated those two loans into a Direct Consolidation Loan before October 31, 2022, the borrower would receive credit for 60 PSLF-qualifying payments on the new Direct Consolidation Loan. See ED, PSLF Waivers. 96 Borrowers submit a PSLF form to ED to document their employment in qualifying public service and to apply for PSLF and TEPSLF benefits. ED, Public Service Loan Forgiveness (PSLF), & Temporary Expanded PSLF (TEPSLF) Certification and Application, OMB No. 1845-0110, expiration date August 31, 2021. 97 ED, PSLF Waivers. 98 In general, a set of loans may be consolidated only once. However, the HEA specifies that a Direct Consolidation Loan may be used to repay a previously obtained Direct Consolidation or FFEL Consolidation Loan for the purposes of applying for PSLF. HEA § 428C(a)(3)(B)(i)(V)(bb). 99 ED, PSLF Waivers. 100 For example, if a borrower, while employed in a PSLF qualifying job, was in repayment status for 150 payments periods on their FFEL program loan and then consolidated the FFEL program loan into a Direct Consolidation Loan before October 31, 2022, the borrower would not receive a refund for the 30 payments made in excess of 120 payments. Congressional Research Service 18 Federal Student Loan Debt Relief in the Context of COVID-19 PSLF program benefits cannot receive a refund for payments that did not count as PSLF-qualifying previously but that would now count under the limited PSLF waiver.101 Teacher Loan Forgiveness The Teacher Loan Forgiveness102 program provides loan forgiveness benefits to borrowers of qualifying Direct Loan and FFEL program loans.103 To qualify for benefits, a borrower must serve 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. The CARES Act specifies that ED shall waive the requirement that years of qualifying teaching 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 completes a total of five years of qualifying service. Qualifying service may include service performed before, during, and after the qualifying emergency.104 Borrower Defense to Repayment In certain circumstances, borrowers may seek discharge of their Title IV student loans by asserting as a borrower defense to repayment (BDR) certain acts or omission of an IHE, if the cause of action directly relates to the loan or educational services for which the loan was provided. Although statutory language specifies BDR as an available discharge option only for Direct Loan borrowers,105 FFEL and Perkins Loan program borrowers may consolidate their loans into a Direct Loan program Consolidation Loan to pursue BDR discharge.106 Three different standards for evaluating BDR discharge may be applied to eligible student loans. The applicable BDR standards to be used largely depend on when the Direct Loan was made. For Direct Consolidation Loans made on or after July 1, 2020, the standard applicable to loans made on or after July 1, 2020, applies. ED has stated that FFEL and Perkins Loan program borrowers who submitted a BDR application prior to July 1, 2020, and who would need to consolidate those loans into a Direct Consolidation Loan to receive BDR relief, will have their BDR eligibility evaluated by the standards for Direct Consolidation Loans disbursed between July 1, 2017, and July 1, 2020.107 101 ED, PSLF Waivers. 102 HEA §§428J, 460. 103 For purposes of the Teacher 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 Title IV on October 1, 1998, or as of the date the borrower first borrowed such loan after October 1, 1998. 104 CARES Act §3519. 105 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 Implications. 106 34 C.F.R. §685.212(k)(2). 107 ED, Waivers and Flexibilities, p. 79863. Some view the BDR standards for loans disbursed between July 1, 2017, and July 1, 2020, to be more beneficial to borrowers than the standards that apply to loans made on or after July 1, 2020. See, for example, Letter from AFL-CIO, AFSCME, and Allied Progress, et al. to Senator Dick Durbin and Representative Susie Lee, December 9, 2019, https://ticas.org/wp-content/uploads/2019/12/Coalition-Letter-on-BD-CRA_.pdf. Congressional Research Service 19 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).108 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 will 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 totally disabled based on an individual unemployability rating.109 When borrowers are determined to be totally 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 annually submit to ED documentation of their annual earnings from employment.110 On March 29, 2021, ED announced that borrowers who had a TPD discharge approved on the basis of the first or second criterion above will 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 will have their loan discharge restored and their three-year monitoring period will resume based on their original discharge date.111 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 108 HEA §§437(a), 455(a)(1), and 464(c)(1)(F)(ii); 34 C.F.R. §§674.61, 682.402, and 685.213. 109 For additional information on TPD discharge, see CRS Report R45931, Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers. 110 A borrower’s loans may be reinstated if the borrower has annual earnings from employment in excess of 100% of the 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. federal poverty guidelines for a family of two. ~~T o~~To show compliance with this requirement, borrowers show compliance with this requirement, borrowers must annually must annually
submit to ED documentation of their annual earnings from employment.submit to ED documentation of their annual earnings from employment. 34 C.F.R. §§674.61, 682.402, and 685.213. 34 C.F.R. §§674.61, 682.402, and 685.213.
~~87 U.S. Department of Education~~111 ED, “Education Department Announces Relief for Student Loan Borrowers with , “Education Department Announces Relief for Student Loan Borrowers with ~~T otal~~
Total and Permanent Disabilities and Permanent Disabilities ~~During~~ During the COVID-19 Emergency,” press release, March 29, 2021, https://www.ed.gov/the COVID-19 Emergency,” press release, March 29, 2021, https://www.ed.gov/
news/press-releases/education-departmentnews/press-releases/education-department -announces-relief-student-loan-borrowers-total-and-permanent-disabilities--announces-relief-student-loan-borrowers-total-and-permanent-disabilities-
during-covid-19-emergency; and during-covid-19-emergency; and ED, Office of Federal Student Aid, “COVID-19 Relief: Total and Permanent Disability Discharge,” https://studentaid.gov/announcements-events/covid-19/disability-discharge (accessed February 4, 2022). ED has also indicated that if an individual’s TEACH Grant service obligation was reinstated because they failed to submit annual earnings documentation on or after March 13, 2020, it will return the individual’s TEACH Grant service obligation to its discharge status.~~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~~
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Education Relief Opportunities for Students Act of 2003 (HEROES Act).112 The HEROES Act can only be implemented, however, in connection with a war or other military action or a national only be implemented, however, in connection with a war or other military action or a national
emergency declared by the President.emergency declared by the President.89113 The HEROES Act provides the Secretary with authority to 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 1. those who are serving on active duty or performing qualifying National Guard 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 ~~pandemic90~~pandemic114 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 three years. During this period, the Secretary ~~wil~~ will pay any interest that accrues on 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 programs who were in an “in-school” deferment or a graduate ~~fel owship~~fellowship
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
individualindividual may retain their deferment for a period of up to three years during may retain their deferment for a period of up to three years during
which they are affected. During this period, the Secretary which they are affected. During this period, the Secretary ~~wil~~ will pay any interest 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
individualindividual is excluded from the usual three-year limit on forbearance. Also, for is excluded from the usual three-year limit on forbearance. Also, for
~~these categories of affected individuals, borrowers of Perkins Loans may be~~

~~HEROES~~ 112 The 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. Act; P.L. 107-122; 20 U.S.C. 1070 note) with an expiration date of September 30, 2003. ~~T he~~The Higher Higher
Education ReliefEducation Relief Opportunities for Students Act of 2003 (2003 HEROES Act; P.L. 108-76; 20 U.S.C. 1070 note), Opportunities for Students Act of 2003 (2003 HEROES Act; P.L. 108-76; 20 U.S.C. 1070 note),
provided for waiver authority and regulatory flexibility from FY2003provided for waiver authority and regulatory flexibility from FY2003 -FY2005; it was extended by P.L. 109-78 to -FY2005; it was extended by P.L. 109-78 to
September 30, 2007, and finally made permanent by P.L. 110-93 (20 U.S.C. 1098aa et seq.). For additional informationSeptember 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 on these waiver authorities, see archived CRS ~~CRS~~ Report R42881, Report R42881, Education-Related Regulatory Flexibilities, Waivers, and Federal
Assistance in Response to Disasters and National ~~Em ergencies~~.
89Emergencies. 113 On March 13, 2020, President On March 13, 2020, President ~~T rump~~Trump declared a national emergency concerning COVID-19; “Declaring a National 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.
90 114 For information on the current waivers and For information on the current waivers and ~~modificat ions issued, see Department of Education~~modifications issued, see ED, “Federal Student Aid , “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 Program, and the ~~Federal~~ Federal Direct Loan Program),” 82Direct Loan Program),” 82 Federal Register 45465-45471, September 29, 2017. 45465-45471, September 29, 2017. ~~T hese~~
These currently available currently available ~~waivers~~ waivers and modifications willand modifications will expire on September 30, 2022.expire on September 30, 2022.
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these categories of affected individuals, borrowers of Perkins Loans may be granted forbearance based on an oral request and without written documentation granted forbearance based on an oral request and without written documentation
for a one-year period and an additional three-month transition period. for a one-year period and an additional three-month transition period.
 Borrowers of FFEL program loans who are in the 1st or 2nd categories of affected  Borrowers of FFEL program loans who are in the 1st or 2nd categories of affected
individuals individuals may be granted forbearance based on an oral request and without may be granted forbearance based on an oral request and without
written documentation for a one-year period and an additional three-month written documentation for a one-year period and an additional three-month
transition period. transition period.
 For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and  For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and
FFEL program borrowers) or Perkins Loan FFEL program borrowers) or Perkins Loan ~~Cancel ation~~Cancellation (Perkins Loan program (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 service ~~wil~~ will not be considered interrupted by any period during which they are in 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 according to ~~general y~~generally applicable procedures, applicable procedures,91115 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 a three-month transition period ~~shal~~ shall not be considered an interruption in the 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 loans and are seeking to reestablish eligibility for Title IV federal student aid by 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 month transition period ~~shal~~ shall not be considered an interruption in the series of 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 three-month transition period ~~shal~~ shall not be considered an interruption in the series 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
individualsindividuals are unable to provide information are unable to provide information ~~normal y required annual y~~normally required annually to 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 flexibilityperiod. This flexibility is made in lieu of having their payment amount adjusted 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.

91 115 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 Alexandra Hegji

Analyst in Social Policy Analyst in Social Policy

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