Federal Student Loan Debt Relief in the
August 24, 2020
Context of COVID-19
Alexandra Hegji
The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of
Analyst in Social Policy
three federal student loan programs: the William D. Ford Federal Direct Loan (Direct Loan)

program, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan
program. As of December 31, 2019, $1.5 trillion in such loans, borrowed by or on behalf of 42.8

million individuals, remained outstanding. In response to the current coronavirus disease 2019
(COVID-19) pandemic, numerous questions have arisen regarding student loan repayment flexibilities and debt relief that
may be available to 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
COVID-19. These include the following:
 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
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
toward the 20- or 25-year repayment periods under the income-driven repayment plans.
 Income-driven repayment (IDR) plans afford borrowers the opportunity to make payments in amounts that
are capped at a specified share or proportion of their discretionary income over a repayment period not to
exceed 20 or 25 years, depending on the plan. At the end of the repayment period, the remaining balance of
an individual’s loans is forgiven.
Recent administrative and congressional actions, including the enactment of the Coronavirus Aid, Relief, and Economic
Security (CARES) Act (P.L. 116-136), provide additional student loan relief measures:
 The accrual of interest on federally held student loans is suspended from March 13, 2020, through
December 31, 2020.
 Federally held student loans are being placed in a special administrative forbearance for March 13, 2020,
through December 31, 2020. During this time, borrowers will not be required to make payments due on
their loans. This special administrative forbearance will count toward the 120 monthly payments required
to qualify for 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.
 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 being
suspended on federally held student loans for March 13, 2020, through December 31, 2020.

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

Introduction
The Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the operation of
three federal student loan programs: the Wil iam D. Ford Federal Direct Loan (Direct Loan)
program, the Federal Family Education Loan (FFEL) program, and the Federal Perkins Loan
program.1 While new loans are authorized to be made only through the Direct Loan program,
FFEL and Perkins Loan program loans remain outstanding and borrowers of such loans remain
responsible for repaying them.
As of December 31, 2019, $1.5 tril ion in these loans, borrowed by or on behalf of 42.8 mil ion
individuals, remained outstanding.2
 Direct Loan program loans are owned by the U.S. Department of Education
(ED). As of December 31, 2019, approximately 35.3 mil ion borrowers owed
about $1.3 tril ion in Direct Loan debt.3
 FFEL program loans may be held by private lenders, guaranty agencies, or ED.
As of December 31, 2019, approximately 11.8 mil ion borrowers owed about
$257.2 bil ion in FFEL program debt. Of that, approximately $87.7 bil ion was
held by ED, representing between 3.3 mil ion and 6 mil ion borrowers,4 and
$169.3 bil ion was held by private lenders or guaranty agencies, representing
debt for between 6.0 mil ion and 7.2 mil ion borrowers.5
 Perkins Loan program loans may be held by institutions of higher education
(IHEs) that made the loans or by ED. For award year 2018-2019 (July 1, 2018-
June 30, 2019), approximately 2.0 mil ion borrowers owed approximately $5.7
bil ion in Perkins Loans. Of that, ED held nearly $1 bil ion, representing debt

1 For additional information on loans made under these programs, see CRS Report R45931, Federal Student Loans
Made Through the William D. Ford Federal Direct Loan Program : Term s and Conditions for Borrowers; CRS Report
RL31618, Cam pus-Based Student Financial Aid Program s Under the Higher Education Act; and CRS Report R40122,
Federal Student Loans Made Under the Federal Fam ily Education Loan Program and the William D. Ford Federal
Direct Loan Program : Term s and Conditions for Borrowers (archived).
2 T his number represents an unduplicated number of federal student loan recipients. Some individuals may have
borrowed from more than one federal student loan program. As such, the numbers of recipients for the various federal
student loan programs presented herein sum to greater than 42.8 million. U.S. Department of Education, Office of
Federal Student Aid, Federal Student Aid Data Center, “ Federal Student Aid Portfolio Summary,”
https://studentaid.gov/sites/default/files/fsawg/datacenter/library/PortfolioSummary.xls, (hereinafter, ED, “ Federal
Student Aid Portfolio Summary”).
3 ED, “Federal Student Aid Portfolio Summary.”
4 Approximately 3.17 million borrowers have FFEL program loans placed with ED-contracted loan servicers, and
approximately 2.9 million borrowers have FFEL pro gram loans placed with the ED-contracted Default Management
System. An individual may have FFEL program loans placed with both ED-contracted loan servicers and the Default
Management System; thus, the unduplicated count of FFEL program borrowers with loans held by ED is unknown.
U.S. Department of Education, Office of Federal Student Aid, Federal Student Aid Data Center, “Location of Federal
Family Education Loan Program Loans,” https://studentaid.gov/sites/default/files/fsawg/datacenter/library/
LocationofFFELPLoans.xls.
5 Approximately 6 million borrowers have FFEL program loans held by commercial lenders, and approximately 1.2
million borrowers have FFEL program loans held by guaranty agencies. An individual borrower may have FFEL
program loans held by a commercial lender and a guaranty agency ; thus, the unduplicated count of FFEL program
borrowers with loans that are not held by ED is unknown . U.S. Department of Education, Office of Federal Student
Aid, Federal Student Aid Data Center, “Location of Federal Family Education Loan Program Loans,”
https://studentaid.gov/sites/default/files/fsawg/datacenter/library/LocationofFFELPLoans.xls.
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Federal Student Loan Debt Relief in the Context of COVID-19

owed for approximately 375,000 borrowers, and IHEs held about $4.7 bil ion,
representing debt for approximately 1.6 mil ion borrowers.6
In response to the current coronavirus disease 2019 (COVID-19) pandemic, numerous questions
have arisen regarding student loan repayment flexibilities and debt relief that may be available to
individuals to al eviate potential financial effects related to COVID-19. The HEA general y
authorizes several options for qualifying individuals. Recent administrative and congressional
action, including the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES)
Act (P.L. 116-136), provide additional student loan relief measures.
This report provides an overview of student loan repayment flexibilities and debt relief provisions
that may be available to borrowers facing financial difficulties resulting from the pandemic. It
first lists some pre-existing loan terms and conditions (authorized through statute and regulations)
that may be available to individuals. It then discusses specific administrative and congressional
actions taken to address student loan debt in the context of COVID-19. The report concludes with
a brief description of additional existing authorities that could be utilized to address other aspects
of student loan relief.
Pre-existing Loan Terms and Conditions
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
periods of deferment and forbearance, which offer borrowers temporary relief from the obligation
to make monthly payments; and the availability of income-driven repayment (IDR) plans (e.g.,
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
discretionary income, for a maximum repayment period of 20 or 25 years.
Deferment
A deferment 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
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
(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
(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
under the IDR plans). In most instances, a borrower must proactively apply for and request a
deferment.
A deferment may be granted for a variety of reasons. Unemployment deferment and economic
hardship deferment (described below) may be especial y relevant to individuals facing financial
difficulties due to COVID-19. These types of deferment are available to borrowers of loans made
under the Direct Loan, FFEL, and Perkins Loan programs.

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

8 34 C.F.R. §§674.34(d), 682.210(h) and (s)(5), 685.204(f); U.S. Department of Education, Office of Federal Student
Aid, “ Unemployment Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/
downloadForm.action?searchT ype=library&shortName=unemploy&localeCode=en-us&_ga=
2.212772371.684834368.1556119313 -753213604.1539381477.
9 For Perkins Loan program loans, IHEs must reaffirm continued deferment eligibility on at least an annual basis; 34
C.F.R. §674.38(d).
10 After a period of unemployment deferment, a Perkins Loan borrower is entitled to a post -deferment grace period of
six consecutive months; 34 C.F.R. §674.34(k).
11 34 C.F.R. §§674.34(e), 682.210(s)(6), 685.204(g); U.S. Department of Education, Office of Federal Student Aid,
“Economic Hardship Deferment Request,” OMB No. 1845-0011, https://studentloans.gov/myDirectLoan/
downloadForm.action?searchT ype=library&shortName=ecohardshp&localeCode=en-us&_ga=
2.9995570.684834368.1556119313-753213604.1539381477.
12 A borrower may also qualify for an economic hardship deferment if he or she is serving as a volunteer in the Peace
Corps.
13 After a period of economic hardship deferment, a Perkins Loan borrower is entitled to a post -deferment grace period
of six consecutive months; 34 C.F.R. §674.34(k).
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Forbearance
Forbearance 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
of time. During periods of forbearance, no interest subsidies are provided (i.e., interest continues
to accrue) and borrowers ultimately remain responsible for paying al of the interest that accrues
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
Loan program and FFEL program loans; it is not capitalized (but remains due) for Perkins Loan
program loans.14 Periods of forbearance do not count toward the 120 monthly payments required
to qualify for PSLF,15 and are not included in a borrower’s repayment period (e.g., periods of
student loan debt burden forbearance do not count toward the maximum repayment periods of 20
or 25 years under the IDR plans). General y, borrowers must apply for forbearance.
General forbearance and student loan debt burden forbearance (described below) may be
especial y relevant to individuals facing financial difficulties due to COVID-19. These types of
forbearance are available to borrowers of loans made under the Direct Loan, FFEL, and Perkins
Loan programs.
General Forbearance
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
change in employment, medical expenses, or other reasons.16
General forbearance may be granted for an initial period of up to 12 months, renewed upon the
borrower’s request, and limited to a maximum of 36 months.17 At the end of the forbearance
period, any unpaid interest that accrued during the period is capitalized.
Student Loan Debt Burden Forbearance
A borrower may receive a forbearance on the basis of having a federal student loan debt burden
that equals or exceeds 20% of his or her total monthly taxable income.18 To qualify, a borrower
must demonstrate that his or her required monthly payments on HEA Title IV federal student
loans (e.g., loans made under the Direct Loan, FFEL, or Perkins Loan programs) equal or exceed
that amount.

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

19 For additional information on the IDR plans, see U.S. Department of Education, Office of Federal Student Aid,
“Income-Driven Repayment Plans, https://studentaid.gov/manage-loans/repayment/plans/income-driven (accessed
March 31, 2020) and CRS Report R45931, Federal Student Loans Made Through the William D. Ford Federal Direct
Loan Program : Term s and Conditions for Borrowers.
20 Discretionary income is defined as the portion of a borrower’s adjusted gross income that is in excess of a specified
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, “Income-Driven Repayment (IDR) Plan Request,” OMB No. 1845-0102,
https://studentaid.gov/app/images/idrPreview.pdf.
24 On December 19, 2019, the Fostering Undergraduate T alent by Unlocking Resources for Education Act (the
FUT URE Act; P.L. 116-91) was enacted. Among other provisions, P.L. 116-91 authorizes the Internal Revenue Service
to share relevant tax return information with ED for the purpose of determining a Direct Loan borrower ’s eligibility for
and repayment obligations under IDR plans. As of the publication date of this report, it appears these procedures have
not yet been operationalized.
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to borrowers of qualifying loans, and temporarily ceasing col ections on qualifying defaulted
loans.
Returning Direct Loans
Under the HEA, a Direct Loan borrower may be required to return or repay al or part of the
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
depending on whether a student did not begin attendance at an IHE or whether he or she
withdrew.
Failure to Begin Attendance
If a student does not begin attendance at an IHE in a payment or enrollment period, Title IV funds
(including Direct Loan funds) must be returned to ED by the IHE and/or the student according the
regulatory provisions.25 For Direct Loan amounts required to be returned by the student, the IHE
must immediately notify ED (or its loan servicers) when it becomes aware that the student wil
not begin or has not begun attendance. Loan servicers then issue a final demand letter to the
borrower. The demand letter requires the borrower to repay any loan principal and accrued
interest within 30 days from the date the letter is mailed.26 If the borrower fails to comply with the
demand letter, he or she is considered in default on the loan.
In March 2020, ED issued guidance27 to IHEs specifying some flexibilities that may be used to
address the return of Direct Loans by recipients who did not begin attendance at an IHE due to
COVID-19. ED stated that if a student was unable to begin attendance due to a COVID-19-
related school closure, the IHE is not required to notify the loan servicer of the student’s failure to
begin 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,
including receiving a six-month grace period prior to the start of repayment.
Withdrawal
HEA Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the
end of the payment or enrollment period for which funds were disbursed, Title IV funds
(including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient
according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an
aid recipient is required to return any portion of a Direct Loan, he or she repays it in accordance
with the terms of the loan.28
The CARES Act authorizes several waivers with respect to Return of Title IV Aid procedures.
Specific to Direct Loan borrowers, the act requires ED to cancel a borrower’s obligation to repay

25 34 C.F.R. §668.21.
26 34 C.F.R. §685.211(e)(2).
27 U.S. Department of Education, Office of Postsecondary Education, “ Guidance for interruptions of study related to
Coronavirus (COVID-19),” electronic announcement, March 5, 2020 (updated June 16, 2020), https://ifap.ed.gov/
electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19 .
28 34 C.F.R. §668.22(h)(3)(i).
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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 qualifying emergency.29
Direct Subsidized Loan Limitations
Since July 1, 2013, a student who is a first-time borrower30 may only borrow Direct Subsidized
Loans for a period that may not exceed 150% of the published length of the academic program in
which he or she is currently enrolled (e.g., six years for enrollment in a four-year bachelor’s
degree program). This is referred to as the Direct Subsidized Loan maximum eligibility period.31
If a Direct Subsidized Loan borrower subject to this provision remains enrolled beyond the
applicable maximum eligibility period, he or she wil lose the interest subsidy and wil become
responsible for paying the interest that accrues on his or her Direct Subsidized Loans after the
date that the maximum eligibility period is exceeded.
The CARES Act specifies that ED shal exclude from the maximum eligibility period any
semester (or equivalent) that the student does not complete due to a qualifying emergency, if ED
is “able to administer such policy in a manner that limits complexity and the burden on the
student.”32
Entering Repayment
In general, borrowers of Direct Loan, FFEL, and Perkins Loan program loans are required to
make payments on the loans during a repayment period. The repayment period for Direct
Subsidized Loans, Direct Unsubsidized Loans, FFEL Stafford Loans, FFEL Unsubsidized Loans,
and Perkins Loans begins after a grace period.33 The grace period begins after the borrower ceases
to be enrolled in an eligible postsecondary program on at least a half-time basis (enrollment on at
least a half-time basis is often referred to as in-school status for federal student loan purposes).
The repayment period for Direct PLUS Loans (to graduate students and to parents of dependent
undergraduate students), Direct Consolidation Loans, FFEL PLUS Loans, and FFEL
Consolidation Loans is required to begin when the loan is fully disbursed. However, borrowers of
these loans, along with borrowers of Direct Subsidized Loans, Direct Unsubsidized Loans, FFEL
Stafford Loans, FFEL Unsubsidized Loans, and Perkins Loans, may qualify for a deferment on
the basis of their in-school status (or the in-school status of the student on whose behalf a PLUS
Loan was made to a parent borrower), during which time they are not required to make payments
on their loans but during which interest may accrue.34 A borrower qualifies for such an in-school

29 T he CARES Act defines a qualifying emergency as (1) “a public health emergency related to the coronavirus
declared by the Secretary of Health and Human Services pursuant to section 319 of the Public Health Service Act ”; (2)
an event related to the coronavirus for which the President declared a major disaster or an emergency under section 401
or 501, respectively, of the Robert T . Stafford Disaster Relief and Emergency Assistance Act”; or (3) “ a national
emergency related to the coronavirus declared by the President under section 201 of the National Emergencies Act.”
30 A first-time borrower means “an individual who has no outstanding balance of principal or interest on a Direct Loan
Program or FFEL Program loan on July 1, 2013, or on the date the borrower obtains a Direct Loan Program loan after
July 1, 2013”; 34 C.F.R. §685.200(f)(1)(i).
31 HEA §455(q); 34 C.F.R. §685.200(f).
32 P.L. 116-136, §3506.
33 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 nine months.
34 34 C.F.R. §§674.33, 682.210, 685.204(b).
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deferment if he or she, or the student on whose behalf a PLUS Loan is made, is enrolled on at
least a half-time basis.
ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans
whose loan status was in-school on the date the student’s attendance at an IHE was interrupted
due to COVID-19. The loan status of such borrowers wil continue to be reported as in-school
until the IHE determines that the student has withdrawn from it.35 ED has permitted IHEs to defer
reporting a student’s withdrawn status if the IHE has a reasonable expectation that it wil reopen
at the start of a payment period that begins no later than 90 days following its COVID-19-related
closure and that the student wil resume attendance when the IHE reopens.36
ED guidance does not address Perkins Loans.
Interest Accrual
Interest is charged on loans made under the Direct Loan, FFEL, and Perkins Loan programs.
Typical y, under a limited set of circumstances the federal government subsidizes some or al of
the interest that would otherwise accrue on certain Direct Subsidized Loans, FFEL Stafford
Loans, and Perkins Loans.37
For March 13, 2020, through December 31, 2020, the accrual of interest on federal y held student
loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan program loans held by
ED) is suspended.38 This means borrowers wil not be responsible for paying interest on their ED-
held loans for this period (In practice, ED-held student loan interest rates have been effectively
set to 0% during this time period.) This wil permit borrowers to enter into a period of deferment
or forbearance without concern for whether interest would accrue and capitalize. Borrowers who

35 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDAT ED
Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-
announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
36 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “ Guidance for
interruptions of study related to Coronavirus (COVID-19),” March 5, 2020 (updated March 20, 2020),
https://ifap.ed.gov/electronic-announcements/030520Guidance4interruptionsrelated2CoronavirusCOVID19 .
37 Periods of interest subsidy include, but are not limited to, in-school periods while a borrower is enrolled in an eligible
program on at least a half-time basis, during a grace period following enrollment on at least a half -time basis, and
during periods of authorized deferment .
38 T his policy was originally put in place via administrative action by ED on March 20, 2020. Under the policy, interest
rates for ED-held loans were to be set to 0% for a 60-day period, beginning March 13, 2020. U.S. Department of
Education, “ Delivering on President T rump’s Promise, Secretary DeVos Suspends Federal St udent Loan Payments,
Waives Interest During National Emergency,” press release, March 20, 2020, https://www.ed.gov/news/press-releases/
delivering-president -trumps-promise-secretary-devos-suspends-federal-student -loan-payments-waives-interest-during-
national-emergency. Subsequently, the CARES Act specified that “ interest shall not accrue” on Direct Loan program
loans and ED-held FFEL program loans “ for which payment was suspended” (discussed later in this report) through
September 30, 2020. Following enactment of the CARES Act, ED updated it s guidance to borrowers, stating that the
0% interest applies to all ED-held loans, including ED-held Perkins Loans, from March 13, 2020 , to September 30,
2020. U.S. Department of Education, Office of Federal Student Aid, “ Coronavirus and Forbearance Info for Students,
Borrowers, and Parents,” https://studentaid.gov/announcements-events/coronavirus#student -questions (accessed April
14, 2020) (hereinafter, ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents”). On August 8,
2020, President T rump directed ED to extend the “waiver of all interest” on federally held student loans through
December 31, 2020. U.S. President (Donald T rump), “Continued Student Loan Payment Relief During the COVID-19
Pandemic: Memorandum for the Secretary of Education,” 85 Federal Register 49585, August 13, 2020. Subsequently,
ED updated its guidance to borrowers, stating that to effectuate the President’s direction, the 0% interest rate would be
extended through December 31, 2020. ED “ Coronavirus and Forbearance Info for Students, Borrowers, and Par ents”
(accessed August 24, 2020).
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continue making payments on their loans during this time of interest suspension wil not have
decreased monthly payments. They wil have the full amount of the payments applied toward
loan principal.39 Borrowers who are eligible for this benefit need not apply for it; ED wil
automatical y adjust their accounts to reflect the interest suspension.
In addition, ED has authorized FFEL program lenders and institutions that hold Perkins Loans to
provide the “zero interest” benefit on these nonfederal y held loans on a voluntary basis.40
Borrowers who are ineligible for the zero interest benefit because their FFEL program loan holder
or Perkins Loan program IHE is not providing it may take advantage of the interest suspension
period by consolidating such loans into a Direct Consolidation Loan, which is eligible for the
interest suspension benefit.41
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
to capitalization when they begin to make payments again at a later point in time.
Cessation of Payments
In addition to the pre-existing deferment and forbearance options available to borrowers, ED and
Congress have recently taken further steps to enable borrowers to temporarily cease making
payments on their qualifying loans.
For March 13, 2020, through December 31, 2020, federal y held student loans (e.g., al Direct
Loan program loans, and FFEL and Perkins Loan program loans held by ED) wil be placed in an
administrative forbearance.42 During this time, borrowers wil not be required to make payments

39 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).
40 ED guidance specifies that the FFEL and Perkins Loan program loan holders may provide “the same zero interest”
benefit to the loans they hold on a voluntary basis. T he guidance references the zero interest accrual benefit applicable
from March 13, 2020, to September 30, 2020. It is unclear whether FFEL and Perkins Loan program loan holders are
authorized to extend the payment suspension through December 31, 2020. U.S. Department of Education, Office of
Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related to
Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19. Some IHEs have suspended payments on their Perkins Loans
in response to COVID-19. See, for example, Danielle Douglas-Gabriel, “ University of California offers Perkins Loan
borrowers relief. Will other colleges follow?” The Washington Post, April 20, 2020.
41 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed April 14, 2020).
42 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).
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due on their loans.43 Borrowers who are eligible for this benefit need not apply for it; ED wil
automatical y suspend payments.44
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
borrower’s account between March 13, 2020, and December 31, 2020, can be refunded to the
borrower. A borrower must contact his or her loan servicer to request a refund.45
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.46 Borrowers who are
ineligible for this benefit because their FFEL program loan holder or Perkins Loan program IHE
is not providing it may take advantage of the benefit by consolidating such loans into a Direct
Consolidation Loan.
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 period47 (e.g.,
periods of unemployment deferment do not count toward the maximum repayment periods of 20
or 25 years under the IDR plans). However, for Direct Loan borrowers (the only borrowers

43 On March 20, 2020, ED announced it had directed all federal student loan servicers to grant a 60-day administrative
forbearance (beginning March 13, 2020) to any borrower of a federally held student loan who requested one. In
addition, ED authorized loan servicers to automatically place into a 60 -day administrative forbearance any borrower of
a federally held loan who is more than 31 days delinquent on his or her loans as of March 13, 2020, or who becomes 31
days delinquent thereafter. U.S. Department of Education, “ Delivering on President T rump’s Promise, Secretary DeVos
Suspends Federal Student Loan Payments, Waives Interest During National Emergency,” press release, March 20,
2020, https://www.ed.gov/news/press-releases/delivering-president -trumps-promise-secretary-devos-suspends-federal-
student-loan-payments-waives-interest-during-national-emergency. Subsequently, the CARES Act was enacted, which
requires that ED automatically suspend all payments on Direct Loans and ED-held FFEL program loans through
September 30, 2020. While the CARES Act did not provide for a suspension of payments on ED-held Perkins Loan
program loans, ED has applied a similar suspension to such loans. U.S. Department of Education, Office of
Postsecondary Education, “ UPDAT ED Guidance for interruptions of study related to Coronavirus (COVID -19),”
electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19 ; and ED, “ Coronavirus and Forbearance Info for Students,
Borrowers, and Parents” (accessed April 2, 2020). On August 8, 2020, President T rump directed ED to take action “to
continue the temporary cessation of payments” on federally held student loans through December 31, 2020. U.S.
President (Donald T rump), “Continued Student Loan Payment Relief During the COVID-19 Pandemic: Memorandum
for the Secretary of Education,” 85 Federal Register 49585, August 13, 2020. Subsequently, ED updated its guidance
to borrowers, stating that to effectuate the President’s directive, the administrative forbearance would be extended
through December 31, 2020. ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed
August 24, 2020).
44 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020)
45 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).
46 ED guidance specifies that the FFEL and Perkins Loan program loan holders may provide “the same … cessation of
payment benefits” to the loans they hold on a voluntary basis. T he guidance references the payment suspension
applicable from March 13, 2020, to September 30, 2020. It is unclear whether FFEL and Perkins Loan program loan
holders are authorized to extend the payment suspension through December 31, 2020. U.S. Department of Education,
Office of Postsecondary Education, Electronic Announcement, “UPDATED Guidance for interruptions of study related
to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19 . Some commercial FFEL program loan holders have
voluntarily provided borrowers with additional forbearance options in response to the COVID -19 pandemic. See, for
example, Marie Albiges, “ Virginia offers temporary relief on some private loans during coronavirus, ” The Virginian-
Pilot, April 30, 2020. Some IHEs have suspended payments on their Perkins Loans in response to COVID -19. See, for
example, Danielle Douglas-Gabriel, “ University of California offers Perkins Loan borrowers relief. Will other colleges
follow?”, The Washington Post, April 20, 2020.
47 For additional information on PSLF, see CRS Report R45389, The Public Service Loan Forgiveness Program:
Selected Issues.
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eligible for PSLF) suspended payments that would have been made during the special
administrative forbearance wil count toward the 120 monthly payments required to qualify for
PSLF if the borrower works full-time in qualifying employment during the suspension.48
For borrowers of federal y held loans, the suspended payments wil also count toward the 20- and
25-year repayment periods under the IDR plans, and toward the nine voluntary payments within
10 consecutive months required for individuals to rehabilitate their defaulted loans.49 It is unclear
whether suspended payments on nonfederal y held FFEL program loans whose lender has
authorized this special administrative forbearance would count toward the 20- and 25-year
repayment periods under applicable IDR plans. Perkins Loans, regardless of whether they are
held by ED or an IHE, are ineligible for IDR plans.
In addition, ED recently 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
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.50
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).51 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) 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

48 Prior to enactment of the CARES Act, the ED-authorized administrative forbearance did not address whether periods
of such forbearance would count toward PSLF’s 120-monthly payment requirement. Subsequently, Section 3513(c) of
the CARES Act stated that “ED shall deem each month for which a loan payment was susp ended” under the CARES
Act “as if the borrower of the loan had made a payment for the purpose of any loan forgiveness program.” Following
enactment of the CARES Act, ED updated its guidance to borrowers, stating that payments suspended between March
13, 2020, and September 30, 2020, would count toward PSLF’s 120 -required monthly payments. ED, “ Coronavirus and
Forbearance Info for Students, Borrowers, and Parents” (accessed April 14, 2020). T he August 8, 2020, presidential
memorandum entitled “Continued Student Loan Payment Relief During the COVID-19 Pandemic: Memorandum for
the Secretary of Education,” (85 Federal Register 49585, August 13, 2020) did not address whether payment
suspension would count toward the PSLF 120 -monthly payment requirement. Subsequently, ED updated its guidance
to borrowers, stating that payments suspended through December 31, 2020, would count toward PSLF’s 120 -required
monthly payments. ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August
24, 2020).
49 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020). Loan
rehabilitation is the process by which a borrower may bring a loan out of default by adhering to specified repayment
requirements. 34 C.F.R. §§674.39, 682.405, 685.211(f). The history described in footnote 49 similarly applies to
suspended payments’ application to the forgiveness period under the various IDR plans and their application to loan
rehabilitation.
50 U.S. Department of Education, Office of Postsecondary Education, “UPDATED Guidance for interruptions of study
related to Coronavirus (COVID-19),” electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-
announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
51 34 C.F.R. §§674.31(b)(5), 6823411(f), 685.211(d).
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voluntary debt resolution attempts do not succeed, involuntary collection practices may be
utilized, which include administrative wage garnishment; offset of federal income tax returns,
Social Security benefits, and certain other federal benefits; and civil litigation.52
Collection of Defaulted Loans
For March 13, 2020, through December 31, 2020, ED wil halt the above-described involuntary
debt collection practices, and ED-contracted PCAs wil stop proactive collection activities (i.e.,
stop making collection cal s and sending letters or bil ing statements to defaulted borrowers) for
al federal y held student loans (e.g., al Direct Loan program loans, and FFEL and Perkins Loan
program loans held by ED).53 However, borrowers may contact PCAs to continue repayment
arrangements they had made prior to implementation of this policy or to consolidate their loans
out of default.54
Borrowers of federal y held loans whose federal tax refund or Social Security benefits were in the
process of being withheld on or after March 13, 2020, and before December 31, 2020, wil have
any offset portion returned to them. Borrowers whose wages were garnished between March 13,
2020, and December 31, 2020, wil have their wages refunded.55
In addition, ED has authorized institutions to stop collection activities on defaulted Perkins Loans
that they hold through September 30, 2020, upon notification from a borrower, a member of the
borrower’s family, or another reliable source that the borrower has been affected by COVID-19.56

52 For additional information, see 34 C.F.R. Parts 30, 31, 34; and CRS Report R44845, Administration of the William
D. Ford Federal Direct Loan Program .
53 On March 25, 2020, ED announced that, effective March 13, 2020, it would halt involuntary collection activities and
PCAs would stop all proactive collection activities on all federally held student loans for 60 days. U.S. Depart ment of
Education, “ Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for Student Loan
Borrowers, Will Refund More T han $1.8 Billion to Students, Families,” press release, March 25, 2020,
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. Subsequently, the CARES Act was enacted,
which required ED to suspend all involuntary collectio n activities on Direct Loans and ED-held FFEL program loans
through September 30, 2020. While the CARES Act did not provide for the suspension of proactive collection activities
on any federally held student loan, nor the suspension of involuntary collection activities on federally held Perkins
Loans program loans, ED suspended both proactive and involuntary collection activities for all federally held loans
(including federally held Perkins Loan programs loans) through September 30, 2020. ED, “ Coronavirus and
Forbearance Info for Students, Borrowers, and Parents” (accessed April 14, 2020). T he August 8, 2020, presidential
memorandum entitled “Continued Student Loan Payment Relief During the COVID-19 Pandemic: Memorandum for
the Secretary of Education,” (85 Federal Register 49585, August 13, 2020) did not address whether ED should suspend
proactive or involuntary collection activities for federally held student loans. Subsequently, ED updated its guidance to
borrowers, stating that both proactive and involunt ary collection activities would be suspended through December 31,
2020. ED, “ Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).
54 ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020).
55 Ibid.
56 U.S. Department of Education, Office of Postsecondary Education, Electronic Announcement, “UPDAT ED
Guidance for interruptions of study related to Coronavirus (COVID-19),” April 3, 2020, https://ifap.ed.gov/electronic-
announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
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Satisfactory Repayment Arrangements, Loan Rehabilitation, and
Consolidation Out of Default
To regain Title IV student aid eligibility, a defaulted federal student loan borrower must make six
on-time, voluntary monthly payments on a defaulted loan.57 In addition, loan rehabilitation offers
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
Loan program borrowers must make nine on-time payments according to general y applicable
procedures.58 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
eligible to do so, a borrower must make three consecutive, on-time, full monthly payments on a
defaulted loan.59
ED has stated that for specified periods, if a borrower of a defaulted Direct Loan, FFEL, or
Perkins Loan program loan fails to make any of the consecutive monthly payments required to re-
establish eligibility for Title IV federal student aid,60 to rehabilitate such defaulted loans,61 or to
consolidate such defaulted loans out of default,62 the borrower shal not be considered to have
missed any of those payments.
Reporting to Consumer Reporting Agencies
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
and repayment status (e.g., whether a borrower is current on making payments).63
The CARES Act specifies that through September 30, 2020, ED shal ensure that any payment
that has been suspended under the special administrative forbearance described above shall be

57 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b).
58 34. C.F.R. §§674.39, 682.405, 685.211(f).
59 34 C.F.R. §685.102(b).
60 T his policy applies to Direct Loan, FFEL, and Perkins Loan program loans through June 30, 2020. U.S. Department
of Education, Office of Postsecondary Education, “UPDAT ED Guidance for interruptions of study related to
Coronavirus (COVID-19),” electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
61 T his policy applies to federally held Direct Loan, FFEL, and Perkins Loan program loans through December 31,
2020. ED, “Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020). T his
policy applies to nonfederally held FFEL and Perkins Loan program loans through June 30, 2020. U.S. Department of
Education, Office of Postsecondary Education, “UPDATED Guidance for interruptions of study related to Coronavirus
(COVID-19),” electronic announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
62 T his policy applies to Direct Loans and federally held FFEL and Perkins Loans through June 30, 2020. ED,
“Coronavirus and Forbearance Info for Students, Borrowers, and Parents” (accessed August 24, 2020). T he policy
applies to nonfederally held FFEL program loans through June 30, 2020. It appears this policy applies to nonfederally
held Perkins Loan program loans through June 30, 2020. U.S. Department of Education, Office of Postsecondary
Education, “UPDAT ED Guidance for interruptions of study related to Coronavir us (COVID-19),” electronic
announcement, April 3, 2020, https://ifap.ed.gov/electronic-announcements/
040320UPDATEDGuidanceInterruptStudyRelCOVID19 .
63 See, for example, U.S. Department of Education, “Master Promissory Note: Direct Subsidized Loans and Direct
Unsubsidized Loans, William D. Ford Federal Direct Loan Program,” OMB No. 1845 -0007, https://studentaid.gov/app/
subUnsubHT MLPreview.action.
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reported to a consumer reporting agency as if it were a regularly scheduled payment made by the
borrower. 64
Teacher Loan Forgiveness
The Teacher Loan Forgiveness65 program provides loan forgiveness benefits to borrowers of
qualifying Direct Loan and FFEL program loans.66 To qualify for benefits, a borrower must serve
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.67
Additional Flexibilities
In addition to the above-described administrative and congressional actions that have been taken
in response to COVID-19, further flexibility and authority is provided through the Higher
Education Relief Opportunities for Students Act (HEROES Act).68 The HEROES Act can only be
implemented, however, in connection with a war or other military action or a national emergency
declared by the President.69 The HEROES Act provides the Secretary with authority to waive or
modify statutory and regulatory requirements that apply to the HEA Title IV student aid programs
in an effort to help affected individuals. There are three categories of affected individuals:
1. those who are serving on active duty or performing qualifying National Guard
duty during a war or other military operation or national emergency;
2. those who reside or are employed in an area that is declared a disaster area by
any federal, state, or local official in connection with a national emergency; and

64 Neither the August 8, 2020, presidential memorandum entitled “Continued Student Loan Payment Relief During the
COVID-19 Pandemic: Memorandum for the Secretary of Education,” (85 Federal Register 49585, August 13, 2020),
nor ED guidance indicate how the extended suspended loan payments (payments suspended October 1, 2020 -December
31, 2020) shall be reported to consumer reporting agencies.
65 HEA §§428J, 460.
66 For purposes of the T eacher Loan Forgiveness program, qualifying loans include Direct Loan program and FFEL
program Subsidized Loans, Unsubsidized Loans, and Consolidation Loans (to the extent they are used to repay a
Subsidized or Unsubsidized Loan). Borrowers must have had no outstanding balance on any federal student loan made
through a program authorized under HEA T itle IV on October 1, 1998, or as of the date the borrower first borrowed
such loan after October 1, 1998.
67 CARES Act, §3519.
68 T he provisions were originally enacted by the Higher Education Relief Opportunities for Students Act of 2001 (2001
HEROES Act; P.L. 107-122; 20 U.S.C. 1070 note) with an expiration date of September 30, 2003. T he Higher
Education Relief Opportunities for Students Act of 2003 (2003 HEROES Act; P.L. 108-76; 20 U.S.C. 1070 note),
provided for waiver authority and regulatory flexibility from FY2003-FY2005; it was extended by P.L. 109-78 to
September 30, 2007, and finally made permanent by P.L. 110-93 (20 U.S.C. 1098aa et seq.). For additional information
on these waiver authorities, see CRS Report R42881, Education-Related Regulatory Flexibilities, Waivers, and Federal
Assistance in Response to Disasters and National Em ergencies.
69 On March 13, 2020, President T rump declared a national emergency concerning COVID-19; “ Declaring a National
Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak,” March 18, 2020, 85 Federal Register
15337.
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3. those who suffered direct economic hardship as a direct result of a war or other
military operation or national emergency.70
Examples of support that may be available to student loan borrowers under the HEROES Act
include the following:
 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
grace period excludes any period, not to exceed three years, during which a
borrower is an affected individual.
 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
a 1st or 2nd category affected individual may retain their in-school status for up to
three years. During this period, the Secretary wil pay any interest that accrues on
a FFEL Stafford Loan.
 Borrowers of loans made under the Direct Loan, FFEL, and Perkins Loan
programs who were in an “in-school” deferment or a graduate fel owship
deferment but left school because they became a 1st or 2nd category affected
individual may retain their deferment for a period of up to three years during
which they are affected. During this period, the Secretary wil pay any interest
that accrues on a FFEL Stafford Loan.
 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
individual is excluded from the usual three-year limit on forbearance. Also, for
these categories of affected individuals, borrowers of Perkins Loans may be
granted forbearance based on an oral request and without written documentation
for a one-year period and an additional three-month transition period.
 Borrowers of FFEL program loans who are in the 1st or 2nd categories of affected
individuals may be granted forbearance based on an oral request and without
written documentation for a one-year period and an additional three-month
transition period.
 For borrowers that may qualify for Teacher Loan Forgiveness (Direct Loan and
FFEL program borrowers) or Perkins Loan Cancel ation (Perkins Loan program
borrowers) on the basis of continuous or uninterrupted qualifying service, such
service wil not be considered interrupted by any period during which they are in
the 1st or 2nd categories of affected individuals or during a three-month transition
period.
 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
according to general y applicable procedures,71 any payments missed during
periods when they are in the 1st or 2nd categories of affected individuals or during
a three-month transition period shal not be considered an interruption in the
series of payments required for loan rehabilitation.

70 For information on the current waivers and modifications issued, see Office of Postsecondary Education, Department
of Education, “ Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program,
Federal Family Education Loan Program, and the Federal Direct Loan Program), ” 82 Federal Register 45465-45471,
September 29, 2017. T hese currently available waivers and modifications will expire on September 30, 2022.
71 34 C.F.R. §§674.39, 682.405, 685.211(f).
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 For borrowers who defaulted on Direct Loan, FFEL, or Perkins Loan program
loans and are seeking to reestablish eligibility for Title IV federal student aid by
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-
month transition period shal not be considered an interruption in the series of
payments required for purposes of reestablishing Title IV eligibility.
 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
period when they are in the 1st or 2nd category of affected individuals or during a
three-month transition period shal not be considered an interruption in the series
of payments required for purposes of reestablishing Title IV aid eligibility.
 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
individuals are unable to provide information normal y required annual y to
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
period. This flexibility is made in lieu of having their payment amount adjusted
to be based on a standard 10-year repayment plan or an alternative repayment
plan, as applicable.

Author Information

Alexandra Hegji

Analyst in Social Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
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Congressional Research Service
R46314 · VERSION 4 · UPDATED
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