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

April 16, 2020 – May 30, 2023 R46314

Federal Student Loan Debt Relief in the
May 30, 2023
Context of COVID-19
Alexandra Hegji
Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the
Analyst in Social Policy
operation of 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. 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 December 31, 2022, $1.6 trillion in loans from all these
programs, borrowed by or on behalf of 43.8 million individuals, remained outstanding. In response to the COVID-19
pandemic, numerous questions arose 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 permanently authorizes several flexibilities that may be relevant to individuals facing financial difficulties resulting
from COVID-19. These flexibilities 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 (IDR) plans.
• IDR plans afford borrowers the opportunity to make payments on their loans 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.
Beyond these permanently authorized options, various congressional and administrative actions, including the enactment of
the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) and invocation of the Higher Education
Relief Opportunities for Students Act of 2003 (HEROES Act) by the Administration, provide additional student loan relief
measures:
• 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, through the end of the payment pause period (see below).
• ED-held student loans and certain non-ED-held student loans are being placed in a special administrative
forbearance (payment pause) for March 13, 2020, through 60 days after the earlier of the resolution of
litigation regarding the Administration’s one-time student loan debt policy (see the final bullet point below)
or June 30, 2023 (“the end of the payment pause period”). 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., Social Security benefits) are suspended on ED-held student loans and
certain non-ED-held student loans for March 13, 2020, through one year after the end of the payment pause
period.
• Multiple rules related to the 120 monthly payments required to qualify for PSLF were waived for a limited
time. In all cases, borrowers must have met PSLF employment criteria.
• ED will conduct a one-time revision to the accounts of borrowers with ED-held loans to provide credit
toward the IDR plan loan forgiveness period for any months in which they were in repayment status and for
specified periods of deferment or forbearance. Borrowers with loans that have accumulated time in
repayment for 20 or 25 years, as applicable, will receive automatic loan forgiveness.
• ED plans to cancel up to (1) $10,000 per borrower whose annual income in 2020 or 2021 was less than
$125,000 (for individuals) or less than $250,000 (for certain married borrowers or heads of households),
and (2) an additional $10,000, for up to $20,000 total, for borrowers who meet the above income criteria
and received a Pell Grant at any point.
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Federal Student Loan Debt Relief in the Context of COVID-19

Introduction
Title IV of the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended) authorizes the
operation of 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.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
borrowers of such loans remain responsible for repaying them.
As of December 31, 2022, approximately $1.6 trillion in these loans, borrowed by or on behalf of
43.8 million individuals,2 remained outstanding.
• Direct Loan program loans are owned by the U.S. Department of Education
(ED). As of December 31, 2022, approximately 38.1 million borrowers owed
about $1.4 trillion in Direct Loan debt.3
• FFEL program loans may be held by private lenders, guaranty agencies (GAs),
or ED. As of December 31, 2022, approximately 8.8 million borrowers owed
about $198.6 billion in FFEL program debt. Of that, approximately $77.0 billion
was held by ED, representing between 2.6 million and 5.1 million borrowers4;
about $94.8 billion was held by private lenders, representing debt for about 3.6
million borrowers; and $26.8 billion was held by guaranty agencies, representing
debt for about 1.1 million borrowers.5
• Perkins Loan program loans may be held by institutions of higher education
(IHEs) that made the loans or by ED. As of September 15, 2022, ED held about
$1.4 billion in Perkins Loans, representing debt owed for approximately 439,000
borrowers, and IHEs held about $2.6 billion, representing debt for approximately
910,000 borrowers.6

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: Terms and Conditions for Borrowers; CRS Report
RL31618, Campus-Based Student Financial Aid Programs Under the Higher Education Act; and CRS Report R40122,
Federal Student Loans Made Under the Federal Family Education Loan Program and the William D. Ford Federal
Direct Loan Program: Terms and Conditions for Borrowers (archived).
2 This 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 43.8 million. U.S. Department of Education (ED), 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 2.6 million borrowers have FFEL program loans placed with ED-contracted loan servicers, and
approximately 2.5 million borrowers have FFEL program loans placed with the ED-contracted Default Management
System. An individual may have FFEL program loans placed with both ED-contracted loan servicers and the Default
Management System; thus, the unduplicated count of FFEL program borrowers with loans held by ED is unknown.
ED, 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 An individual borrower may have FFEL program loans held by a commercial lender and a GA; thus, the unduplicated
count of FFEL program borrowers with loans that are not held by ED is unknown. ED, 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.
6 CRS email communication with ED, September 23, 2022. An individual borrower may have Perkins Loan program
loans held by ED and an IHE; thus, the unduplicated headcount of Perkins Loan borrowers is unknown. IHEs are not
(continued...)
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Federal Student Loan Debt Relief in the Context of COVID-19

In response to the 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 generally authorizes several options for
qualifying individuals. Congressional and administrative action, including the enactment of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) and invocation of
the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) by the
Administration, 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 in light of the pandemic. It first
lists some preexisting 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.
Preexisting 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 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
typically 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 especially relevant to individuals facing financial

required to report the outstanding interest balance of their Perkins Loans; thus, estimates of the outstanding balance of
IHE-held Perkins Loans may be understated.
7 Similarly, periods of deferment do not count toward the 120 monthly payments required to qualify for Temporary
Expanded PSLF (TEPSLF). Effective July 1, 2023, ED regulations specify that select periods of deferment, including
economic hardship deferment, are to count toward the required 120 monthly payments under PSLF. ED, “Institutional
Eligibility Under the Higher Education Act of 1965, as Amended; Student Assistance General Provisions; Federal
Perkins Loan Program; Federal Family Education Loan Program; and William D. Ford Federal Direct Loan Program,”
87 Federal Register 66065, November 1, 2022 (hereinafter, ED, Final Rule November 1, 2022).
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difficulties due to COVID-19. These types of deferment are available to borrowers of loans made
under the Direct Loan, FFEL, and Perkins Loan programs.
Unemployment Deferment
A borrower who is seeking to obtain full-time employment and is either not employed or
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 they have registered
with a public or private employment agency (if one is available within 50 miles) and are
diligently seeking 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 Loan program Consolidation Loans (Direct Consolidation
Loans),11 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 they are experiencing an economic
hardship.12 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.13
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.14 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 each of
the IDR plans.

8 34 C.F.R. §§674.34(d), 682.210(h) and (s)(5), 685.204(f); ED, Office of Federal Student Aid, “Unemployment
Deferment Request,” OMB No. 1845-0011, https://studentaid.gov/sites/default/files/UnemploymentDeferment.pdf.
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 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); ED, Office of Federal Student Aid, “Economic Hardship
Deferment Request,” OMB No. 1845-0011, https://studentaid.gov/sites/default/files/EconomicHardshipDeferment.pdf.
13 A borrower may also qualify for an economic hardship deferment if they are serving as a volunteer in the Peace
Corps.
14 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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During an economic hardship deferment, an interest subsidy is provided on Direct Subsidized
Loans, the subsidized component of Direct Consolidation Loans, FFEL Stafford Loans, the
subsidized component of FFEL Consolidation Loans, and Perkins Loans.
Forbearance
Forbearance constitutes permission for a borrower to temporarily cease making monthly
payments, to make payments in reduced amounts, or to make payments over an extended period.
During periods of forbearance, no interest subsidies are provided (i.e., interest continues to
accrue) and borrowers ultimately remain responsible for paying all 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 capitalized15 into the principal balance of
Direct Loan program16 and FFEL program loans; for Perkins Loan program loans, unpaid accrued
interest not capitalized (but remains due).17 Periods of forbearance typically do not count toward
the 120 monthly payments required to qualify for PSLF,18 and typically 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). Generally,
borrowers must apply for forbearance.
General forbearance and student loan debt burden forbearance (described below) may be
especially 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) based on experiencing a temporary hardship due to financial difficulties, a change in
employment, medical expenses, or other reasons.19
General forbearance may be granted for an initial period of up to 12 months, renewed upon the
borrower’s request, and limited to a cumulative maximum amount of time.20 At the end of the
forbearance period, any unpaid interest that accrued on Direct Loan and FFEL program loans
during the period is capitalized.21

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 Effective July 1, 2023, ED regulations specify that unpaid accrued interest will not capitalize when a borrower exits
forbearance on a Direct Loan program loan. ED, Final Rule, November 1, 2022, p. 66055.
17 34 C.F.R. §§674.33(d), 382.211(a)(4), 385.205(a).
18 Similarly, periods of forbearance do not count toward the 120 monthly payments required to qualify for TEPSLF.
19 34 C.F.R. §§674.33(d)(5)(ii), 682.211(a)(2)(i), 685.205(a)(1); ED, “General Forbearance Request,” OMB No. 1845-
0031, https://studentaid.gov/sites/default/files/GeneralForbearance.pdf.
20 A borrower’s loan servicer (in the case of Direct Loan program loans) or loan holder (in the case of FFEL program
loans) may limit the maximum duration of general forbearance. 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://studentaid.gov/sites/default/files/GeneralForbearance.pdf.
21 In general, interest does not capitalize on Perkins Loans following periods of forbearance.
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Student Loan Debt Burden Forbearance
If a borrower’s federal student loan debt burden equals or exceeds 20% of their total monthly
gross (taxable) income, they may receive a forbearance.22 To qualify, a borrower must
demonstrate that their 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.
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 cumulative of 36
months.23
Income-Driven Repayment Plans
IDR plans24 afford borrowers the opportunity to make payments in amounts that are capped at a
specified proportion of their discretionary income.25 After making the equivalent of 240 or 300
monthly payments26 (equivalent to 20 or 25 years), depending on the plan, a borrower’s
remaining loan balance 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 Loan27 borrowers) are eligible for any of
these plans.28 FFEL program borrowers (other than Parent PLUS loan borrowers) are only eligible
for the IBR plans.29 Perkins Loan borrowers are not eligible for any IDR plan.

22 34 C.F.R. §674.33(d)(5)(i), 682.211(h)(2)(i)(B), 685.205(a)(6); ED, Mandatory Forbearance Request, “Student Loan
Debt Burden,” OMB No. 1845-0018, https://studentaid.gov/sites/default/files/StudentLoanDebtBurdenForbearance.pdf.
23 Student loan debt burden forbearance is available to FFEL and Direct Loan program borrowers for up to 36 months.
Student loan debt burden 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).
24 For additional information on the IDR plans, see ED, Office of Federal Student Aid, “Income-Driven Repayment
Plans, https://studentaid.gov/manage-loans/repayment/plans/income-driven (accessed April 10, 2023) and CRS Report
R45931, Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program: Terms and
Conditions for Borrowers.
25 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.
26 A borrower’s payments need not be separate to count toward their IDR repayment period. For example, if a
borrower’s monthly loan payment is equal to $50 per month, the borrower did not make payments for three months,
and then subsequently made a lump-sum payment in the amount of $150, the borrower would be credited with having
made three monthly payments toward their IDR repayment period. Alternatively, if the same borrower made a $25
payment each month, they would not be credited with having made a monthly payment until the full $50 is received.
CRS email communication with ED, September 22, 2022.
27 A parent of a dependent undergraduate student may borrow a Parent PLUS Loan on behalf of the student to help
finance the cost of the student’s postsecondary education.
28 34 C.F.R. §685.208.
29 34 C.F.R. §682.215.
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Individuals must apply to repay their loans according to an IDR plan.30 In addition, they must
annually provide documentation of their income and family size, which is used to determine their
discretionary income, to remain eligible for IDR repayment.31 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 will be recalculated accordingly.
Administrative and Congressional Actions Taken in
Response to the COVID-19 Pandemic
ED and Congress have taken steps to provide additional forms of relief to federal student loan
borrowers in response to the COVID-19 pandemic. These include cancelling Direct Loans for
payment periods during which qualifying individuals withdrew from their course of study due to
COVID-19, temporarily suspending interest accrual on qualifying loans, expanding the instances
under which a forbearance may be available to borrowers of qualifying loans, temporarily ceasing
collections on qualifying defaulted loans, temporarily waiving or making adjustments to program
rules for certain loan repayment and forgiveness programs, and announcing a new loan
cancellation policy for most federal student loan borrowers. Some of the relief is available
through a specified end date that is applicable to all borrowers. The duration of other types of
relief is based on IHE administrative calendars.32 The federally declared national emergency
ended April 10, 2023.33
In some instances, the Administration has invoked the HEROES Act to effectuate some of the
relief detailed in this report (see text box).
The HEROES Act
The Higher Education Relief Opportunities for Students Act of 2003 (the HEROES Act), as amended, authorizes
the Secretary of Education to “waive or modify any statutory or regulatory provision applicable to the student
financial assistance programs,” under HEA, Title IV, “as the Secretary deems necessary in connection with a war
or other military operation or national emergency” to ensure that, among other things, affected individuals “are
not placed in a worse position financially” in relation to that assistance. Affected individuals include the fol owing:
•
persons on active duty or qualifying National Guard duty during a war, military operation, or national
emergency;
•
persons who reside or are employed in an area that is declared a disaster area in connection with a national
emergency; and

30 ED, “Income-Driven Repayment (IDR) Plan Request,” OMB No. 1845-0102, https://studentaid.gov/app/images/
idrPreview.pdf.
31 On December 19, 2019, the Fostering Undergraduate Talent by Unlocking Resources for Education Act (the
FUTURE 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 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.
32 Specifically, some relief is available through the end of an IHE’s payment period that includes the end of the
federally declared national emergency related to COVID-19 or through the payment period that begins after the date on
which the federally declared national emergency related to COVID-19 was rescinded. 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. §668.4.
33 See P.L. 118-3.
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•
persons who suffered direct economic hardship as a direct result of a war or other military operation or
national emergency.
ED has indicated that some of the administrative actions described in this report were taken under its HEROES
Act authority, including numerous extensions of the suspension of interest accrual and debt col ections and special
administrative forbearance (payment pause) for qualifying federal student loans. ED has also invoked the HEROES
Act in announcing its policy to cancel up to $10,000 or $20,000, as applicable, in federal student loan debt per
qualifying borrower.34
Returning Direct Loans
Under the HEA, a Direct Loan borrower may be required to return or repay all 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 they withdrew.
Failure to Begin Attendance
If a student does not begin attendance at an IHE in a payment period35 or period of enrollment,36
Title IV funds (including Direct Loan funds) must be returned to ED by the IHE and/or the
student according the regulatory provisions.37 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 will 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.38 If the borrower
fails to comply with the demand letter, they are considered in default on the loan.
ED has waived the requirement that IHEs notify loan servicers if a student will not or has not
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,
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 Federally-declared
national emergency related to COVID-19 is rescinded.”39

34 See, for example, ED, “Federal Student Aid Programs (Federal Perkins Loan Program, Federal Family Education
Loan Program, and William D. Ford Federal Direct Loan Program),” 87 Federal Register 61512, October 12, 2022
(hereinafter ED, Waivers and Flexibilities Update).
35 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. §668.4.
36 A period of enrollment, often called a loan period, is the period for which a Direct Loan is intended. A period of
enrollment “must coincide with one or more bona fide academic terms established by the school for which institutional
charges are generally assessed (e.g., a semester, trimester, or quarter).” 34 C.F.R. §685.201(b).
37 34 C.F.R. §668.21.
38 34 C.F.R. §685.211(e)(2).
39 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).
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Withdrawal
HEA Section 484B specifies that when a Title IV aid recipient withdraws from an IHE before the
end of the payment or enrollment period for which funds were disbursed, Title IV funds
(including any Direct Loans received) must be returned to ED by the IHE and/or aid recipient
according to statutorily prescribed rules (this is often referred to as Return of Title IV Aid). If an
aid recipient is required to return any portion of a Direct Loan, they repay it in accordance with
the terms of the loan.40
The CARES Act authorizes several waivers with respect to Return of Title IV Aid procedures.
Specific to Direct Loan borrowers, the act requires ED to cancel a borrower’s obligation to repay
the entire portion of a Direct Loan associated with a payment period during which the student
withdraws from an IHE as a result of a qualifying emergency.41
Entering Repayment and In-School Status
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.42 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.43 A borrower qualifies for such an in-school
deferment if they, or the student on whose behalf a PLUS Loan is made, is enrolled on at least a
half-time basis.
ED has announced some flexibilities for borrowers of Direct Loan and FFEL program loans
whose loan status was in-school on the date the student’s “attendance at the institution was
interrupted due to COVID-19 national emergency.”44 The loan status of such borrowers will
continue to be reported as in school until the IHE determines that the student has withdrawn from

40 34 C.F.R. §668.22(h)(3)(i).
41 The 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.”
42 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.
43 34 C.F.R. §§674.33, 682.210, 685.204(b).
44 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. 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.
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it.45 ED has permitted IHEs to defer reporting a student’s withdrawn status if the IHE has a
reasonable expectation that it will 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 will resume attendance
when the IHE reopens.46 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.47
ED guidance does not address Perkins Loans with respect to entering repayment.
Interest Accrual
Interest is charged on loans made under the Direct Loan, FFEL, and Perkins Loan programs.
Typically, under a limited set of circumstances the federal government subsidizes some or all of
the interest that would otherwise accrue on certain Direct Subsidized Loans, FFEL Stafford
Loans, and Perkins Loans.48
For March 13, 2020, through 60 days after the earlier of (1) the resolution of the litigation
regarding the Administration’s one-time student loan debt policy (see below) or (2) June 30, 2023
(hereinafter, “the end of the payment pause period”),49 the accrual of interest on certain federal
student loans is suspended.50 The loans on which interest accrual is suspended are (1) ED-held
student loans (e.g., all Direct Loan program loans, and FFEL and Perkins Loan program loans
held by ED); (2) specified51 defaulted FFEL program loans held by guaranty agencies (GAs)
some of which have been transferred to ED (see text box below)52; and (3) specified previously

45 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.
46 ED, Office of Postsecondary Education, Electronic Announcement, “Guidance for interruptions of study related to
Coronavirus (COVID-19),” March 5, 2020 (updated June 16, 2020), https://fsapartners.ed.gov/knowledge-center/
library/electronic-announcements/2020-03-05/guidance-interruptions-study-related-coronavirus-covid-19-updated-
june-16-2020.
47 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.
48 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.
49 ED, Waivers and Flexibilities Update, p. 61514.
50 The 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. (ED, “Delivering on President Trump’s Promise, Secretary DeVos
Suspends Federal Student Loan Payments, Waives Interest During National Emergency,” press release, March 20,
2020.) Since then, it has been extended numerous times via legislative and administrative action. For a timeline of the
history of these actions, see CRS In Focus IF12136, Student Loans: A Timeline of Actions Taken in Light of the
COVID-19 Pandemic. ED invoked the HEROES Act initially to effectuate and subsequently to extend this policy. ED,
Waivers and Flexibilities, p. 79857 and ED, Waivers and Flexibilities Update, pp. 61513-61514.
51 Defaulted FFEL program loans held by GAs that are eligible for this relief are those loans on which a default claim
was paid prior to March 13, 2020, that are not subject to an active bankruptcy filing, and that were still in default as of
May 12, 2021. Also included are those loans on which a default claim was paid on or after March 13, 2020, and those
paid on or prior to the end of the current student loan payment pause that are not subject to an active bankruptcy filing
and that were still in default as of May 12, 2021. In general, a GA pays a default claim (i.e., reimburses the FFEL
program loan holder for most or all of the losses associated with a default) if a borrower defaults on their FFEL
program loan. 34 C.F.R. §682.404(a).
52 The cessation of interest accrual (“0% interest policy”) for defaulted GA-held FFEL program loans was put into
place via administrative action on March 30, 2021. In doing so, ED announced that the policy would apply
(continued...)
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defaulted FFEL program loans.53 The suspension of interest means borrowers of these loan types
will not be responsible for paying interest on such loans for this period. (In practice, the cessation
of interest accrual means that the interest rates for qualifying student loans have been effectively
set to 0% during this time period.) This will permit borrowers to enter into a period of deferment
or forbearance without concern for whether interest would accrue and capitalize. Borrowers who
continue making payments on their loans during this time of interest suspension will not have
decreased monthly payments. They will 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.54 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) will
automatically 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 same zero interest” benefit to non-ED-held loans on a voluntary basis.55 Borrowers
who are ineligible for the interest suspension 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 Consolidation Loan, which is eligible for the
interest suspension benefit.56
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

retroactively to March 13, 2020, but only for the period that a GA held the loan. ED, “Department of Education
Announces Expansion of COVID-19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press
release, March 30, 2021, https://www.ed.gov/news/press-releases/department-education-announces-expansion-covid-
19-emergency-flexibilities-additional-federal-student-loans-default; and 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.
53 These loans are those that were in default “during the pandemic” (regardless of when a default claim was paid) and
for which the default was resolved through rehabilitation or consolidation prior to May 12, 2021. Upon rehabilitation or
consolidation, the loans may have been purchased by third-party lenders or transferred to ED. For any such loans
purchased by a third-party lender, it appears that the loans would be ineligible for the 0% interest policy after the
purchase, as they would be FFEL program loans not held by ED. For any such loans transferred to ED, it appears that
they would be eligible for the 0% interest policy after the transfer, as they would be FFEL program loans held by ED.
54 ED, 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 April 11, 2023) (hereinafter, ED, COVID-19
Loan Payment Pause and 0% Interest).
55 ED, Waivers and Flexibilities, p. 79862, and 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. At least 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.
56 ED, COVID-19 Loan Payment Pause and 0% Interest (accessed April 11, 2023). When a borrower consolidates a
loan(s) into a Direct Consolidation Loan, its proceeds are used to pay off the borrower’s previous loans. The resulting
Direct Consolidation Loan is an entirely new loan with potentially different terms and conditions than the underlying
loans; thus, benefits uniquely associated with the underlying loans (e.g., Perkins Loan cancellation benefits) may no
longer be available upon consolidation. In addition, progress made toward loan forgiveness under the various IDR
plans on the underlying loans typically will not count toward loan forgiveness under an IDR plan on the resulting
Direct Consolidation Loan.
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may temporarily cease making payments on their loans without interest accruing or being subject
to capitalization57 when they begin to make payments again at a later point in time.
Assignment of Certain Defaulted FFEL Program Loans to ED
When an FFEL borrower defaults, the loan holder files a default claim (or insurance claim) with a GA. Upon
payment of the claim, which serves as payment for the holder’s losses stemming from borrower default, the holder
assigns the defaulted loan to the GA, which in turn files a claim with ED for a reinsurance payment. GAs are
responsible for handling initial col ections work on defaulted loans and for administering other aspects of the FFEL
program. In certain instances, ED may require GAs to assign defaulted loans to it. Upon assignment, ED becomes
the holder of the defaulted FFEL program loan and becomes responsible for servicing and col ecting on it (via
contracted loan servicers).
In addition to extending several of the COVID-19 pandemic student loan relief provisions (cessation of interest
accrual and debt col ections) to defaulted GA-held FFEL program loans, ED is also requiring that GAs assign a
subset of such loans to it. Specifically, GAs are required to assign to ED defaulted FFEL program loans on which the
GA pays a default claim to a FFEL program lender on or after March 13, 2020, and on or prior to the end date of
the student loan payment pause for ED-held loans and that are not subject to an active bankruptcy filing. Thus, ED
wil become the owner of these loans and wil become responsible for servicing and col ecting on such loans. In
addition, these loans wil be returned to good standing (i.e., active repayment status).
Sources: 20 U.S.C. §1078(c)(8); 34 C.F.R. §682.409; and U.S. Department of Education, Office of Postsecondary
Education, Dear Col eague Letter GEN-21-03, “Expansion of Col ections Pause to Defaulted FFEL Program Loans
Managed by Guaranty Agencies (Updated May 24, 2021), May 12, 2021, https://fsapartners.ed.gov/knowledge-
center/library/dear-col eague-letters/2021-05-12/expansion-col ections-pause-defaulted-ffel-program-loans-managed-
guaranty-agencies-updated-may-24-2021. For additional information on FFEL program administration and GAs, see
CRS Report R46409, Proposals to Extend CARES Act Provisions to Federal Student Loans Not Held by the Department of
Education: Frequently Asked Questions.
Payment Pause
In addition to the preexisting deferment and forbearance options available to borrowers, ED and
Congress have taken further steps to enable borrowers to temporarily cease making payments on
their qualifying loans.
Monthly payments on ED-held student loans (e.g., all Direct Loan program loans, and FFEL and
Perkins Loan program loans held by ED) and defaulted GA-held FFEL program loans that are
transferred to ED under specified conditions (see text box)58 are suspended for March 13, 2020,
through 60 days after the earlier of (1) the resolution of the litigation regarding the
Administration’s one-time student loan debt policy (see below) or (2) June 30, 2023. (In practice,

57 ED has indicated that, unless a borrower consolidates their loan, any balance of unpaid interest on a borrower’s loan
before March 13, 2020, will not be capitalized during the COVID-19 payment suspension (discussed later in this
report) and through six months after the payment pause ends. 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, see ED, COVID-19 Loan Payment Pause and 0% Interest (accessed May
30, 2023).
58 On March 30, 2021, ED announced that FFEL program loans that defaulted on or after March 13, 2020, would be
returned to good standing. Because such loans have been returned to good standing and are now held by ED, the
COVID-19 monthly payment suspension that applies to ED-held loans now applies to these loans; thus, such borrowers
are not required to make monthly payments on their loans. ED, “Department of Education Announces Expansion of
COVID-19 Emergency Flexibilities to Additional Federal Student Loans in Default,” press release, March 30, 2021,
https://www.ed.gov/news/press-releases/department-education-announces-expansion-covid-19-emergency-flexibilities-
additional-federal-student-loans-default; ED, COVID-19 Loan Payment Pause and 0% Interest (accessed April 14,
2023).
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ED is placing all such loans in administrative forbearance.59) During this time, borrowers will not
be required to make payments due on their loans.60 Borrowers who are eligible for this benefit
need not apply for it; ED is to automatically suspend payments. This special administrative
forbearance is frequently called the payment pause.
In implementing these provisions, ED has indicated that borrowers may opt out of the payment
pause by contacting their loan servicer. In addition, any payments made on a borrower’s account
between March 13, 2020, and the end of the payment pause period can be refunded to the
borrower. Generally, a borrower must contact their loan servicer to request a refund.61
ED has also authorized FFEL program lenders and institutions that hold Perkins Loans to provide
a “the same ... cessation of payments” benefit to borrowers on a voluntary basis.62 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 benefit by consolidating such loans into a Direct
Consolidation Loan.63 ED has 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.64

59 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).
60 On March 20, 2020, ED invoked the HEROES Act and directed all federal student loan servicers to grant a 60-day
administrative forbearance (beginning March 13, 2020) to any borrower of an ED-held student loan who requested one.
In addition, ED authorized loan servicers to automatically place into a 60-day administrative forbearance any borrower
of an ED-held loan who is more than 31 days delinquent on their loans as of March 13, 2020, or who becomes 31 days
delinquent thereafter. (ED, “Delivering on President Trump’s Promise, Secretary DeVos Suspends Federal Student
Loan Payments, Waives Interest During National Emergency,” press release, March 20, 2020; and ED, Waivers and
Flexibilities, p. 79857). Subsequently, the CARES Act was enacted, which required that ED automatically suspend all
payments on Direct Loans and ED-held FFEL program loans through September 30, 2020. While the CARES Act did
not provide for a suspension of payments on ED-held Perkins Loan program loans, ED has applied a similar suspension
to such loans. (ED, Waivers and Flexibilities, p. 79857) Subsequently, invoking the HEROES Act, the Administration
extended the payment pause on numerous occasions. (ED, Waivers and Flexibilities, p. 79857 and ED, Waivers and
Flexibilities Update, pp. 61513-61514.) For a timeline of the history of these actions, see CRS In Focus IF12136,
Student Loans: A Timeline of Actions Taken in Light of the COVID-19 Pandemic. For additional information, see ED,
COVID-19 Loan Payment Pause and 0% Interest.
61 ED, COVID-19 Loan Payment Pause and 0% Interest (accessed April 13, 2023). It appears that borrowers of non-
ED-held FFEL program loans who made voluntary payments during the payment pause period, subsequently defaulted
on their loans during the payment pause period, and had their loans returned to good standing by the Administration
would qualify for a refund of their voluntary payments, even though at the time the payment(s) was made, their loans
did not qualify for the COVID-19 payment suspension.
62 ED, Waivers and Flexibilities, p. 79862, and 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. 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.
63 When a borrower consolidates a loan(s) into a Direct Consolidation Loan, its proceeds are used to pay off the
borrower’s previous loans. The resulting Direct Consolidation Loan is an entirely new loan with potentially different
terms and conditions than the underlying loans; thus, benefits uniquely associated with the underlying loans (e.g.,
Perkins Loan cancellation benefits) may no longer be available upon consolidation. In addition, progress made towards
loan forgiveness under the various IDR plans on the underlying loans typically will not count toward loan forgiveness
under an IDR plan on the resulting Direct Consolidation Loan.
64 ED, Office of Postsecondary Education, Electronic Announcement CB-22-03, “Waiver of the Three-year Cumulative
(continued...)
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Typically, 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 period65 (e.g.,
periods of unemployment deferment do not count toward the maximum repayment periods of 20
or 25 years under the IDR plans). However, for Direct Loan borrowers (the only borrowers
eligible for PSLF), suspended payments that would have been made during the payment pause
will count toward the 120 monthly payments required to qualify for PSLF if the borrower works
full-time in qualifying employment during the pause.66
For borrowers whose loans qualify for the payment pause, the suspended payments will also
count toward the 20- and 25-year repayment periods under the IDR plans. Suspended payments
will also count toward the nine voluntary payments within 10 consecutive months required for
individuals to rehabilitate67 their defaulted loans, but only if those suspended payments occurred
after a borrower entered into a rehabilitation agreement with ED.68 ED has stated that for
defaulted GA-held FFEL program loan borrowers who have entered into a rehabilitation
agreement, “months following entry into the agreement in which payments are not required,
made, or made and then refunded per a borrower request will be automatically counted as a
payment toward the required nine payments within 10 months.”69 It is unclear whether paused
payments on non-ED-held FFEL program loans whose lender has authorized a 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.
ED has authorized (but does not require) 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

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.
65 Similarly, periods of deferment and forbearance do not count toward the 120 monthly payments required to qualify
for TEPSLF.
66 Similarly, paused payments that would have been made during the special administrative forbearance will count
toward the 120 monthly payments required to qualify for TEPSLF. ED, Waivers and Flexibilities, p. 79863; ED,
Waivers and Flexibilities Update, p. 61513; 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 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 April 14, 2023).
67 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).
68 If a borrower was not in a rehabilitation agreement prior to the start of the paused payments, they may enter into one
and any suspended payments following entry into the rehabilitation agreement will count toward rehabilitation. ED,
Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-events/
covid-19/default (accessed April 14, 2023).
69 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. See the “Collection on Defaulted
Loans” section for additional information on refunds of payments made on defaulted GA-held FFEL Program loans.
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is excluded from the three-year cumulative forbearance limit for Perkins Loan borrowers.70 These
flexibilities are available through the end of the IHE’s payment period71 “that includes the end
date for the Federally-declared emergency related to COVID-19.”72
Income-Driven Repayment Plan Account Adjustment
Under the various IDR plans, borrowers may have any remaining outstanding balance of their
FFEL program73 and Direct Loan program loans forgiven after making the equivalent of 240 or
300 monthly payments (20 or 25 years’ worth of payments, depending on the plan) according to
one of more of the IDR plans or certain other qualifying plans. Typically, periods of deferment or
forbearance do not count toward the 20- or 25-year repayment periods under the IDR plans;
although, periods of economic hardship deferment and the above-described COVID-19 related
payment pause do count toward the 20- or 25-year repayment period.74 Payments made on any
loans prior to consolidation do not count toward the 20- or 25-year repayment period.
On April 19, 2022, ED announced a one-time adjustment to borrower loan accounts to revise the
number of IDR-qualifying payments.75 Through the account adjustment, borrowers may receive
IDR payment credit for the following:76

70 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.
71 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.
72 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.
73 Only the Income-Based Repayment plans are available to FFEL program borrowers.
74 See, for example, 34 C.F.R. §§685.209(b)(3)(iii)(B)(9) and 685.221(f)(1)(vii).
75 ED stated that account adjustment was to “address historical failures in the administration of the federal student loan
program and support student loan borrowers through the pandemic.” ED, “Department of Education Announces
Actions to Fix Longstanding Failures in the Student Loan Programs,” press release, April 19, 2022,
https://www.ed.gov/news/press-releases/department-education-announces-actions-fix-longstanding-failures-student-
loan-programs.
76 ED, Office of Federal Student Aid, “Income-Driven Repayment Account Adjustment,” https://studentaid.gov/
announcements-events/idr-account-adjustment (accessed April 14, 2023) (hereinafter, ED, IDR Account Adjustment).
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• any months in which a borrower’s loan was in repayment status, “regardless of
the payments made,77 loan type,78 or repayment plan”;
• 12 months or more of consecutive forbearance;
• 36 or more months of cumulative forbearance, with any combination of
forbearance periods counting toward the cumulative amount79;
• months spent in economic hardship deferment on or after January 1, 2013;
• months spent in “military deferments” after January 1, 2013;
• months spent in any type of deferment, excluding in-school deferment, prior to
2013; and
• months in repayment prior to consolidation.
ED intends to automatically implement the account adjustments (i.e., borrowers need not apply)
for Direct Loan program loans and ED-held FFEL program loans. Borrowers80 with non-ED-held
FFEL program loans must consolidate their loans into the Direct Loan “by the end of 2023.”81
In addition, ED intends to automatically forgive the loans of borrowers who have accumulated at
least 20 or 25 years in repayment, even if they are not currently enrolled in an IDR plan.82 To
receive forgiveness, a borrower will need to meet one of the following requirements, all of which
include the terms of the above-described account adjustment:83
• Borrowers enrolled in the PAYE repayment plan must have been in repayment
for 20 years (240 months).

77 ED has indicated this includes periods during which a loan was in repayment status, as indicated in the National
Student Loan Data System, and includes periods when a payment is due and not made, up through 270 days of
delinquency, or the point in time when a default claim is paid on an FFEL program loan by a guaranty agency.
Repayment status excludes grace periods and periods of deferment, forbearance, or default. CRS email communication
with ED, September 22, 2022.
78 ED has indicated that borrowers who consolidate into the Direct Loan program will have all time in repayment on
their underlying Direct Loan program, FFEL program, and Perkins Loan program loans counted as time in repayment
on their new Direct Consolidation Loan for purposes of the IDR account adjustment. ED has stated time in repayment
on Health Education Assistance Loan (HEAL) program loans and other student loans made under the Public Health
Service Act prior to consolidation would not be counted as time in repayment on the new Direct Consolidation Loan
for purposes of the IDR account adjustment. CRS email communication with ED, September 22, 2022, and October 5,
2022.
79 Borrowers are to receive credit for months in deferment or forbearance that occur after July 1, 1994; however,
months in deferment or forbearance that occurred prior to July 1, 1994, are to be used to determine whether a borrower
meets the 12-month or 36-month forbearance threshold. ED, IDR Account Adjustment (accessed May 15, 2023).
80 ED has indicated that borrowers who exit default prior to the end of the Fresh Start period (see the “The Fresh Start
Initiative” section) are to receive the “the full benefit of the account adjustment and receive credit for periods in default
from March 2020 through the month they exit default.” After the Fresh Start period, only borrowers who rehabilitate
their loan out of default are to benefit from the IDR account adjustment, but they will not receive credit for periods in
default during the payment pause. ED, IDR Account Adjustment (accessed May 15, 2023).
81 ED, IDR Account Adjustment (accessed April 14, 2023); and ED, “Department of Education Announces Actions to
Fix Longstanding Failures in the Student Loan Programs,” press release, April 19, 2022, https://www.ed.gov/news/
press-releases/department-education-announces-actions-fix-longstanding-failures-student-loan-programs.
82 ED has indicated that it expects to forgive loans before the end of the student loan payment pause for eligible
borrowers who reach IDR forgiveness under the account adjustment before August 1, 2023. ED expects all other
eligible borrowers (i.e., those who do not reach forgiveness before August 1, 2023), will begin to see receive IDR
payment credits applied to their loan accounts in 2024. ED, IDR Account Adjustment (accessed May 15, 2023).
83 CRS email communication with ED, September 22, 2022.
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• Borrowers with only undergraduate student loan debt and who are not enrolled in
the PAYE repayment plan must have been in repayment for 20 years (240
months).
• Borrowers with both undergraduate and graduate student loan debt, or graduate
student loan debt only, and who are not enrolled in the PAYE repayment plan
must have been in repayment for 25 years (300 months).
• Parent PLUS Loans and Consolidation Loans used to repay Parent PLUS Loans
must have been in repayment for 25 years (300 months).84
Borrowers whose monthly payments exceed 20 or 25 years following the account adjustment, are
to receive a refund for those monthly payments in excess of 20 or 25 years.85
For borrowers with Direct Consolidation Loans or ED-held FFEL Consolidation Loans,
(regardless of whether the loan repaid Direct Loan program, FFEL program, Perkins Loan
program, or other older HEA program loans), and assuming the repayment histories of the loans
underlying the qualifying Consolidation Loan overlap, ED is to credit the entire Consolidation
Loan with the largest number of months in repayment of the loans that were consolidated.86 For
example, if a borrower had 50 months in repayment on one federal student loan and 100 months
in repayment on a second federal student loan and consolidated those two loans into a Direct
Consolidation Loan, the borrower would receive credit for 100 months of IDR payment credit on
the new Direct Consolidation Loan.87
For borrowers with qualifying Consolidation Loans for which the underlying loans do not have
overlapping repayment histories, the Consolidation Loan may be credited with more months in
repayment than the underlying loan with the longest repayment history. The precise
circumstances under which a borrower might be credited with more months in repayment than
their underlying loan with the longest repayment history are unclear. ED’s website gives the
following example of how this might occur for a borrower with a loan with 50 months of
repayment and another loan with 100 months of repayment:
if the loan with 50 months of time in repayment included January 2017 in repayment status
but the loan with 100 months did not, the resulting consolidation loan might be credited
with 101 months of payments. This can occur where borrowers relied on different
repayment, forbearance, or deferment options on different loans for the same period.88
Income-Driven Repayment Plan Recertification
As previously described, borrowers enrolled in an IDR plan must annually provide
documentation of their income and family size to remain eligible for IDR repayment (referred to

84 CRS email communication with ED, October 5, 2022.
85 ED, IDR Account Adjustment (accessed April 14, 2023).
86 According to ED, borrowers of HEAL program loans (previously made under the Public Health Service Act) may
receive credit toward IDR forgiveness, but only if they first consolidated those loans with Direct Loan program, FFEL
program, or Perkins Loan program loans. Such borrowers are to only receive credits on the HEAL program loan for
repayment periods associated with payment periods of their HEA loans. For example, if a borrower had 100 months of
payment on their HEAL program loan and 60 months of payment on a Direct Loan program Unsubsidized Loan and
then consolidated those two loans into a Direct Consolidation Loan, they would receive credit for 60 months of IDR
payment credit on their Direct Consolidation Loan. ED, IDR Account Adjustment (accessed May 15, 2023).
87 ED, IDR Account Adjustment (accessed May 15, 2023).
88 ED, IDR Account Adjustment (accessed May 15, 2023).
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as recertification).89 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 and has stated that the earliest a borrower could be required to do so is six months after the
end of the payment pause period.90 Borrowers may voluntarily recertify their income during the
payment pause. Finally, ED is permitting borrowers to self-report their income, without providing
tax documentation, when applying for or recertifying their IDR plan until six months after the end
of the payment pause period.91
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).92 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)93in 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.94

89 If a borrower fails to recertify their income under an IDR plan, the consequences vary depending on the plan. In
general, a borrower’s monthly repayment will be recalculated in a manner that is not based on their income. Under
some of the IDR plans, a borrower’s failure to recertify income annually will also result in any unpaid interest being
capitalized. Under all of the IDR plans, if a borrower fails to recertify their family size, they will remain in their chosen
IDR plan, but a family size of one will be assumed for them. If a borrower’s actual family size is larger than one, but a
loan servicer assumed a family size of one due to the borrower’s failure to recertify, their monthly payments may
increase under some IDR plans or they may lose eligibility to make payments based on income. ED, Office of Federal
Student Aid, “What will happen if I don’t recertify my income and family size by the annual deadline?”,
https://studentaid.gov/manage-loans/repayment/plans/income-driven#fail-to-recertify (accessed October 3, 2022).
90 As of September 19, 2022, ED had indicated that if a borrower’s recertification date is before July 2023, it will be
“pushed out by one year.” ED, Office of Federal Student Aid, “COVID-19 Relief: Income-Driven Repayment (IDR)
Plans,” https://studentaid.gov/announcements-events/covid-19/income-driven-repayment#when-to-recertify (accessed
April 14, 2023).
91 ED, Office of Federal Student Aid, “COVID-19 Relief: Income-Driven Repayment (IDR) Plans,”
https://studentaid.gov/announcements-events/covid-19/income-driven-repayment#when-to-recertify (accessed April 14,
2023).
92 34 C.F.R. §§674.31(b)(5), 6823411(f), 685.211(d).
93 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 April 14, 2023).
94 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.
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Collections of Defaulted Loans
For March 13, 2020, through one year after the end of the payment pause period,95 ED will halt
involuntary collections practices, which include administrative wage garnishment; offset of
federal income tax returns, Social Security benefits, and certain other federal benefits; and civil
litigation. In addition, 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,96 respectively.97 However,
borrowers may contact the DRG 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.98
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, or whose wages were garnished on or
after March 13, 2020, may have any offset portion returned to them. Borrowers of defaulted GA-
held FFEL program loans who made voluntary payments on or after March 13, 2020, may request
a refund for those payments.99
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-19.100 This flexibility is
available through the end of an IHE’s payment period that includes December 31, 2020, or the

95 CRS communication with ED, February 27, 2023.
96 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, https://www.ed.gov/news/press-releases/
department-education-announces-expansion-covid-19-emergency-flexibilities-additional-federal-student-loans-default;
and 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.
97 The policy to halt debt collection practices for ED-held loans was originally put into place via administrative action
by ED on March 25, 2020. (ED, “Secretary DeVos Directs FSA to Stop Wage Garnishment, Collections Actions for
Student Loan Borrowers, Will Refund More Than $1.8 Billion to Students, Families,” press release, March 25, 2020.)
It is unclear under what authority ED initially effectuated this policy. Subsequently, the CARES Act was enacted,
which required that ED automatically suspend debt collection practices on Direct Loans and ED-held FFEL program
loans through September 30, 2020. While the CARES Act did not provide for a cessation of debt collection on ED-held
Perkins Loan program loans, ED has applied a similar suspension to such loans. (ED, Waivers and Flexibilities, p.
79857) Subsequently, invoking the HEROES Act, ED extended the policy on numerous occasions. ED, Waivers and
Flexibilities, p. 79857 and ED, Waivers and Flexibilities Update, pp. 61513-61514. For a timeline of the history of
these actions, see CRS In Focus IF12136, Student Loans: A Timeline of Actions Taken in Light of the COVID-19
Pandemic.
98 ED, Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-
events/covid-19/default (accessed April 14, 2023).
99 ED, Office of Federal Student Aid, “COVID-19 Relief: Loans in Default,” https://studentaid.gov/announcements-
events/covid-19/default (accessed April 14, 2023).
100 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.
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end of the IHE’s payment period “that includes the end date for the Federally-declared emergency
related to COVID-19,” whichever is later.101
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.102 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 generally applicable
procedures.103 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.104
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 reestablish eligibility for Title
IV federal student aid, to rehabilitate such defaulted loans, or to consolidate such defaulted loans
out of default, the borrower shall not be considered to have missed any of those payments. This is
a temporary flexibility that is available in response to the COVID-19 pandemic; however, ED
guidance is inconsistent as to the duration of this policy.105
The Fresh Start Initiative
On April 6, 2022, ED announced a new policy to “eliminate the negative effects of default for
borrowers who defaulted on their federal student loans prior to the pandemic payment pause.”106
Under this Fresh Start initiative, qualifying borrowers of defaulted Direct Loan and FFEL
program loans, as well as borrowers of ED-held defaulted Perkins Loans, will have several Title
IV student aid benefits temporarily restored that are otherwise unavailable when a borrower is in
default on their loan.107 Such borrowers will also have the opportunity to get out of default and

101 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.
102 34 C.F.R. §§674.9(k), 682.200(b), 685.102(b).
103 34. C.F.R. §§674.39, 682.405, 685.211(f).
104 34 C.F.R. §685.102(b).
105 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.” 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.
Other guidance states this policy (at least for Perkins Loans) “remains in effect,” but does not specify an end date. ED,
Waivers and Flexibilities, p. 79862 and ED, Waivers and Flexibilities Update, p. 61513.
106 ED, Office of Postsecondary Education, Dear Colleague Letter GEN-22-13, “Federal Student Aid Eligibility for
Borrowers with Defaulted Loans,” August 17, 2022, https://fsapartners.ed.gov/knowledge-center/library/dear-
colleague-letters/2022-08-17/federal-student-aid-eligibility-borrowers-defaulted-loans (hereinafter, ED, GEN-22-13).
107 Borrowers with non-ED-held FFEL program loans that defaulted during the student loan payment pause are
ineligible for the Fresh Start initiative, as their loans were restored to active repayment status as a result of the
expansion of COVID-19 student loan relief to defaulted FFEL borrowers announced March 30, 2021.
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retain those benefits in the long term.108 Many of the benefits available to borrowers under the
initiative are to be available until one year after the end of the student loan payment pause period
(often referred to as the Fresh Start period).
Specifically, ED has automatically provided the following benefits to defaulted borrowers.
• ED has restored borrowers’ eligibility for Title IV federal student aid.
• ED is reporting defaulted loans as “current” rather than “in collections” to
consumer reporting agencies.
• ED has stopped reporting borrowers’ default status to the Credit Alert
Verification Reporting System (CAIVRS)—a database of individuals who have
defaulted on federal debts and used to prescreen and verify applicant eligibility
for various federal direct and guaranteed loans.109
Qualifying defaulted borrowers who accept Title IV student aid under the Fresh Start initiative or
who ask to have their loans placed in repayment status after receiving notification from ED that
their loans are being reported to consumer reporting agencies as current rather than in collections
will be permitted to keep the above-listed benefits. In addition, other benefits not available to
defaulted loan borrowers, such as eligibility for IDR plans or loan forgiveness programs, will be
restored to borrowers.110 These borrowers’ loans will be transferred from ED’s DRG to a loan
servicer, their defaulted loans will be returned to in repayment status, and ED will ask consumer
reporting agencies to remove the record of default from the borrower’s credit report. Qualifying
defaulted borrowers who do not take either action during the Fresh Start period will again be
subject to collections after the end of the Fresh Start period and will have their loans reported as
in collections to consumer reporting agencies.111
While typically a defaulted loan may only be rehabilitated once, ED has stated that borrowers
who could take advantage of Fresh Start but who instead choose to rehabilitate their defaulted
loans during the Fresh Start period will not have that rehabilitation count as their one opportunity
to rehabilitate their loan.112 Therefore, if the borrower defaults on the same loan again at a later
time, they may be able to rehabilitate the loan.
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).113

108 ED, Office of Federal Student Aid, “A Fresh Start for Federal Student Loan Borrowers in Default,”
https://studentaid.gov/announcements-events/default-fresh-start (accessed April 14, 2023 (hereinafter ED, Fresh Start).
For additional information, see ED, GEN-22-13.
109 For additional information, see Department of Housing and Urban Development, “CAIVRS-Credit Alert
Verification Reporting System,” https://www.hud.gov/program_offices/housing/sfh/caivrs (accessed April 14, 2023).
110 ED, Fresh Start (accessed October 3, 2022). ED is to also take a number of additional steps related to reporting a
borrower’s loan status to consumer reporting agencies. For additional information, see ED, “A Fresh Start for
Borrowers with Student Loans in Default,” fact sheet, August 16, 2022, https://fsapartners.ed.gov/sites/default/files/
2022-08/FreshStartFactSheet.pdf.
111 ED, Fresh Start (accessed April 14, 2023); ED, “A Fresh Start for Borrowers with Student Loans in Default,” fact
sheet, August 16, 2022.
112 ED, “A Fresh Start for Borrowers with Student Loans in Default,” fact sheet, August 16, 2022.
113 See, for example, ED, “Master Promissory Note: Direct Subsidized Loans and Direct Unsubsidized Loans, William
(continued...)
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ED has announced that it would ensure that any payment that has been suspended under the
payment pause described above shall be reported to a consumer reporting agency as if it were a
regularly scheduled payment made by the borrower.114 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 payment pause period for ED-held loans are to request that consumer reporting agencies
delete the record of default for such loans from the borrower’s credit report.115
Loan Cancellation, Forgiveness, and Discharge
The Title IV federal student loan programs offer borrowers the opportunity to have their
obligation to repay their loans discharged in a variety of circumstances. In response to the
COVID-19 pandemic, a variety of flexibilities related to these pre-existing opportunities have
been made available. These include waivers of certain Public Service Loan Forgiveness and
Teacher Loan Forgiveness program requirements and flexibilities with respect to Borrower
Defense to Repayment and Total and Permanent Disability Discharge. In addition, in August
2022, ED announced a newly established student loan cancellation policy (referred to by ED as
“one-time student loan debt relief”) that is to be available to the majority of Title IV student loan
borrowers.
One-Time Student Loan Debt Relief
On August 24, 2022, ED invoked the Higher Education Relief Opportunities for Students Act of
2003 (HEROES Act)116 and announced a new student loan cancellation policy that is to make
available to millions of federal student loan borrowers up to $20,000 of loan cancellation benefits
per borrower.117 Specifically, the Biden Administration intends to cancel the following:118
• up to $10,000 in student loans for borrowers whose annual income in 2020 or
2021 was less than $125,000 (for individuals or married borrowers who file their
federal income taxes separately), or $250,000 (for married couples filing jointly,
heads of households, or qualifying widow(er)s); borrowers enrolled in

D. Ford Federal Direct Loan Program,” OMB No. 1845-0007, https://fsapartners.ed.gov/sites/default/files/attachments/
2020-04/SubUnsubMPN.pdf.
114 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,” 86 Federal Register 5008, January
19, 2021 and ED, Waivers and Flexibilities Update, p. 61513.
115 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.
116 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. The 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 archived CRS Report R42881, Education-Related Regulatory Flexibilities, Waivers,
and Federal Assistance in Response to Disasters and National Emergencies.
117 For an examination of the asserted HEROES Act authority for this newly announced policy, see CRS Legal Sidebar
LSB10818, Statutory Basis for Biden Administration Student Loan Forgiveness, by Edward C. Liu and Sean M. Stiff.
For additional information on the new student loan cancellation policy, see CRS Insight IN11997, The Biden
Administration’s One-Time Student Loan Debt Relief Policy.
118 ED, Office of Federal Student Aid, “One-Time Student Loan Debt Relief,” https://studentaid.gov/debt-relief-
announcement/one-time-cancellation (accessed April 14, 2023) (hereinafter ED, One-Time Student Loan Debt Relief).
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postsecondary education as dependent students between July 1, 2021, and June
30, 2022, will be eligible for cancellation based on parental income; and
• an additional $10,000, for a total of up to $20,000, in student loans for borrowers
who meet the above criteria and received at least one Pell Grant in any amount at
any point.
Borrowers’ cancellation benefits are to be capped at the amount of their outstanding debt. For
example, if a borrower is eligible for $20,000 in loan cancellation benefits but has an outstanding
balance of $15,000 in qualifying student loans, the individual would only receive $15,000 in loan
cancellation benefits.
These benefits are to be available for ED-held loans (including FFEL and Perkins Loan program
loans) and defaulted FFEL program loans that are held by a GA. Loans must have been disbursed
on or before June 30, 2022, except that for Consolidation Loans only the underlying loans that
were repaid by the Consolidation Loan must have been disbursed on or before June 30, 2022.
Additionally, Direct Consolidation Loans comprising any FFEL or Perkins Loan program loans
not held by ED are eligible for debt relief, so long as the borrower applied for consolidation
before September 29, 2022.119
Borrowers who (1) “successfully apply for and receive” this loan cancellation benefit120 and (2)
who made voluntary payments on their qualifying loans during the COVID-19 payment pause
that brought their outstanding loan balance below the maximum amount of debt relief for which
they are eligible but who did not repay their loan in full are to automatically receive a refund of
those voluntary payments. Refund amounts are to equal the difference between the maximum
amount of loan cancellation for which the borrower is eligible and the borrower’s outstanding
loan balance at the time of cancellation.121
The one-time student loan debt relief policy has not yet been implemented due to lawsuits
challenging the Administration’s legal authority to effectuate it. The Supreme Court heard oral
arguments for the lawsuits on February 28, 2023.122 Thus, cancellation benefits under the policy
would occur, if at all, only after the Supreme Court renders a decision in favor of the
Administration.
Prior to the lawsuits, ED indicated that qualifying borrowers could receive the one-time student
loan debt relief benefit in one of two ways. First, ED estimated that nearly 8 million
borrowers would be eligible to receive the benefit automatically, based on relevant income data
already available to ED.123 Such borrowers would not be required to take any action and would be
informed by ED of the debt relief they would receive; however, borrowers would be given the
option to opt out of receiving the automatic debt relief. Borrowers for whom ED does not have

119 ED, One-Time Student Loan Debt Relief (accessed April 14, 2023).
120 ED, One-Time Student Loan Debt Relief (accessed April 14, 2023).
121 ED, One-Time Student Loan Debt Relief (accessed April 14, 2023).
122 Transcript of Oral Argument, Nebraska v. Biden, No. 22-506 (February 28, 2023), https://www.supremecourt.gov/
oral_arguments/argument_transcripts/2022/22-506_22p3.pdf; and Transcript of Oral Argument, Dep’t. of Educ. v.
Brown No. 22-535 (February 28, 2023), https://www.supremecourt.gov/oral_arguments/argument_transcripts/2022/22-
535_4g15.pdf.
123 ED, “Biden-Harris Administration Announces Final Student Loan Pause Extension Through December 31 and
Targeted Debt Cancellation to Smooth Transition to Repayment,” press release, August 24, 2022, https://www.ed.gov/
news/press-releases/biden-harris-administration-announces-final-student-loan-pause-extension-through-december-31-
and-targeted-debt-cancellation-smooth-transition-repayment.
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relevant income data would be required to apply to ED for debt relief benefits.124 Should the
Supreme Court render a decision in favor of the Administration, it appears that borrowers could
receive the one-time student loan debt relief benefits in one of these two ways.
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.125 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.126 Periods of service performed to receive benefits
under the Teacher Loan Forgiveness program127 may not also be counted toward PSLF qualifying
employment. A borrower must be employed full-time in qualifying public service at the time they
apply for and receive forgiveness.
In October 2021, in response to the COVID-19 emergency, ED announced a series of limited-
time waivers of numerous PSLF program rules128 available to borrowers through October 31,
2022 (referred to by ED as the Limited PSLF Waiver). The waivers were intended to enable
borrowers to receive credit for past periods of repayment that would not otherwise qualify for
PSLF.129 Through October 31, 2022, borrowers could receive PSLF payment credit for the
following periods, so long as the borrower met the requisite public service employment
requirements during those periods of repayment:130
• periods of repayment131 on Direct Loan program, FFEL program, Perkins Loan
program, and other older HEA authorized program loans (e.g., National Defense

124 In fall 2022, ED made available an application for borrowers, and for a short time, ED accepted and processed such
applications. In light of lawsuits challenging ED’s authority to effectuate the one-time student loan debt relief policy,
ED has stopped accepting applications but has stated it intends to retain the applications for potential future use
following resolution of the lawsuits. ED, Office of Federal Student Aid, “Student Loan Debt Relief is Blocked,”
https://studentaid.gov/debt-relief/application, accessed April 14, 2023.
125 For additional information, see CRS Report R45389, The Public Service Loan Forgiveness Program: Selected
Issues (archived).
126 Effective July 1, 2023, ED regulations make a number of changes to PSLF program criteria, many of which relate to
what constitutes a qualifying payment. ED, Final Regulations, November 1, 2022, pp. 66063-66065.
127 For additional information on the Teacher Loan Forgiveness program, see CRS Report R43571, Federal Student
Loan Forgiveness and Loan Repayment Programs.
128 These waivers also apply to TEPSLF. ED, Office of Federal Student Aid, “The Limited PSLF Waiver Opportunity
Ended on Oct. 31, 2022,” https://studentaid.gov/announcements-events/pslf-limited-waiver (accessed April 14, 2023)
(hereinafter, ED, PSLF Waivers).
129 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.
130 ED, PSLF Waivers (accessed April 14, 2023).
131 ED indicated that a “period of repayment” was a calendar month during which a borrower is “in repayment” status
(i.e., not in default, deferment, or forbearance) on their loan.
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Student Loans)132; borrowers were required to submit an application to
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 deferment before 2013;
• periods of economic hardship deferment on or after January 1, 2013;
• periods of forbearance of 12 consecutive months or greater;
• periods of forbearance of 36 cumulative months or greater, with any combination
of forbearance periods counting toward the cumulative amount;
• periods of military service deferment or active military state duty or military
mobilization forbearance133; and
• 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.134
In addition, through October 31, 2022, ED waived
Relationship Between PSLF and
the requirement that a borrower be employed full-
IDR Account Adjustment
time in qualifying public service at the time of
Although the Limited PSLF Waiver ended
application for and forgiveness under PSLF. ED
October 31, 2022, borrowers may receive some
also waived the prohibition against periods of
similar benefits under the IDR account
service performed to receive benefits under the
adjustment (see the “Income-Driven Repayment
Plan Account Adjustment” section). Specifically,
Teacher Loan Forgiveness program also counting
periods for which borrowers receive payment
toward periods of PSLF qualifying employment.135
credits under the IDR account adjustment
between November 1, 2022, and the date the
For borrowers with Direct Consolidation Loans
IDR account adjustment is made are to also
(regardless of whether the loan repaid Direct Loan
count towards the 120 required PSLF payments,
program, FFEL program, Perkins Loan program, or
so long as the borrower meets the requisite
other older HEA program loans), if the underlying
public service employment requirements during
those periods.
loans had differing numbers of qualifying
payments, ED was to credit the entire Direct

132 According to ED, borrowers of Health Education Assistance Loans (HEAL; previously made under the Public
Health Service Act) could also receive PSLF payment credit, but only if they first consolidated those loans with Direct
Loan program, FFEL program, Perkins Loan program, or older HEA program loans. It appears that such borrowers
could 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 could receive credit for 60 payment periods on the new Direct Consolidation
Loan. CRS email communication with ED, January 6, 2022.
133 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.
134 CRS email communication with ED, January 7, 2022.
135 ED, PSLF Waivers (accessed April 14, 2022).
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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.136
Borrowers with Direct Loan program loans and who had previously submitted a Public Service
Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application
(PSLF form)137 were to automatically receive credit for prior repayment periods during which
their employment was determined to be PSLF qualifying. Borrowers who had not previously
submitted a PSLF form or who needed to submit additional PSLF forms to ED could receive
credit for prior repayment periods if they took one of the following steps:
1. used the PSLF Help Tool138 by October 31, 2022, to create a PSLF form that is
eventually approved by ED (even if the form had not been signed by a
borrower’s qualifying employer and submitted to ED by that date);
2. used the PSLF Help Tool by October 31, 2022, but were unable to print the PSLF
form for signature or submission because ED had not yet completed a review of
their employer’s eligibility, and the employer is later determined by ED to be
eligible; or
3. submitted a manual PSLF form (a PSLF form not generated by the PSLF Help
Tool) that is eventually approved by ED with their employer’s signature date on
or before October 31, 2022.139
Borrowers with one or more FFEL program, Perkins Loan program, or older HEA loan program
loans were required to submit an application for a Direct Consolidation Loan through

136 Parent PLUS Loans on their own, or consolidated with no other type of loan, were ineligible to receive additional
months of qualifying payments under the PSLF waivers. However, if a borrower consolidated a Parent PLUS Loan
with other types of loans (e.g., a FFEL program Subsidized Stafford Loan), they could receive credit for PSLF
qualifying payments on the consolidation loan based on repayment periods on 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 (accessed
October 3, 2022).
137 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, https://studentaid.gov/sites/default/files/public-service-
application-for-forgiveness.pdf.
138 The PSLF Help Tool may be used by borrowers to search a database of PSLF qualifying employers, learn which
actions they may need to take to be eligible for PSLF or TEPSLF, and generate the PSLF form. For additional
information, see ED, Office of Federal Student Aid, “Complete the Public Service Loan Forgiveness (PSLF) Form with
the PSLF Help Tool,” https://studentaid.gov/pslf/#!/pslf/launch.
139 ED, PSLF Waivers (accessed April 14, 2023).
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StudentAid.gov140 by October 31, 2022.141 It is unclear whether such borrowers were required to
take one of the steps described above by October 31, 2022, as well.
Borrowers who, with the application of the PSLF payment credits, made more than 120 payments
on an existing Direct Loan, including on an existing Direct Consolidation Loan, were to
automatically receive a refund for the payments made in excess of those 120 payments.
Borrowers could not 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.142 Borrowers who previously received 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.143
Teacher Loan Forgiveness
The Teacher Loan Forgiveness144 program provides loan forgiveness benefits (of up to $17,500)
to borrowers of qualifying Direct Loan and FFEL program loans.145 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.146
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

140 StudentAid.gov is the Office of Federal Student Aid’s primary customer-facing website for parents, students, and
borrowers that contains information on the HEA Title IV programs and provides public access to various tools and
resources related the Title IV aid programs, such as the FAFSA and applications for various student loan forgiveness
options (e.g., PSLF and IDR plans).
141 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).
142 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.
143 ED, PSLF Waivers (accessed April 14, 2023).
144 HEA §§428J, 460.
145 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.
146 CARES Act §3519.
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Direct Loan borrowers,147 FFEL and Perkins Loan program borrowers may consolidate their loans
into a Direct Loan program Consolidation Loan to pursue BDR discharge.148 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.149 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, 2020.150
Total and Permanent Disability Discharge
Borrowers may have their liability to make further payments on their Direct Loan program loans,
FFEL program loans, and Perkins Loan program loans discharged upon being determined to have
a total and permanent disability (TPD).151 Borrowers may be determined to have a total and
permanent disability if they are
• 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;
• 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
• 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.152
A TPD discharge approved based on the first or second criterion above is granted on a conditional
basis for a three-year period153 that begins on the date of discharge.154 During the three-year

147 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.
148 34 C.F.R. §685.212(k)(2).
149 Effective July 1, 2023, ED regulations specify a new BDR standard to be applicable to BDR applications received
on or after July 1, 2023, or pending with ED on July 1, 2023 (regardless of the date the loan was disbursed). ED, Final
Rule, November 1, 2022, pp. 66055-66073.
150 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.
151 HEA §§437(a), 455(a)(1), and 464(c)(1)(F)(ii); 34 C.F.R. §§674.61, 682.402, and 685.213.
152 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.
153 A TPD discharge approved based on the third criterion above is permanent upon being granted (i.e., is not granted
on a conditional basis).
154 Effective July 1, 2023, ED regulations expand the types of documentation and criteria that may be used to determine
whether a borrower is totally and permanently disabled. The new regulations would also eliminate most circumstances
(continued...)
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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.155
On March 29, 2021, ED announced that borrowers who had a TPD discharge approved based on
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.156 On August 19, 2021,
ED subsequently announced that it would indefinitely extend, “beyond the national emergency,”
the March 29, 2021, policy of not requiring borrowers to submit earnings documentation.157
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 HEROES Act.
As detailed in the text box titled “The HEROES Act,” the Secretary of Education is authorized to
waive or modify statutory and regulatory requirements that apply to the HEA Title IV student aid
programs in an effort to assist affected individuals; however, it may only be used in connection
with a war or other military action or national emergency. There are three categories of affected
individuals:
1. persons on active duty or qualifying National Guard duty during a war, military
operation, or national emergency;
2. persons who reside or are employed in an area that is declared a disaster area in
connection with a national emergency; and
3. persons who suffered direct economic hardship as a direct result of a war or other
military operation or national emergency.
ED has indicated that some of the administrative actions described throughout this report were
taken under the authority of the HEROES Act. However, other examples of relief that may be

under which a borrower’s loan would be reinstated during the three-year monitoring period. ED, Final Rule, November
1, 2022, pp. 66059-66060.
155 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. To show compliance with this requirement, borrowers must annually
submit to ED documentation of their annual earnings from employment. 34 C.F.R. §§674.61, 682.402, and 685.213.
156 ED, “Education Department Announces Relief for Student Loan Borrowers with Total and Permanent Disabilities
During the COVID-19 Emergency,” press release, March 29, 2021, https://www.ed.gov/news/press-releases/education-
department-announces-relief-student-loan-borrowers-total-and-permanent-disabilities-during-covid-19-emergency; and
ED, Office of Federal Student Aid, “COVID-19 Relief: Total and Permanent Disability Discharge,”
https://studentaid.gov/announcements-events/covid-19/disability-discharge (accessed April 17, 2023). 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.
157 ED, “Over 323,000 Federal Student Loan Borrowers to Receive $5.8 Billion in Automatic Total and Permanent
Disability Discharges,” press release, August 19, 2021, https://www.ed.gov/news/press-releases/over-323000-federal-
student-loan-borrowers-receive-58-billion-automatic-total-and-permanent-disability-discharges. It appears regulations
to be effective July 1, 2023, would meet ED’s stated objective. ED, Final Rule, November 1, 2022, pp. 66059-66060.
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available to student loan borrowers under the HEROES Act and that were articulated by ED prior
to the COVID-19 pandemic158 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 will 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 fellowship
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 will 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 based on 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 Cancellation (Perkins Loan program
borrowers) on the basis of continuous or uninterrupted qualifying service, such
service will 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 generally applicable procedures,159 any payments missed during
periods when they are in the 1st or 2nd categories of affected individuals or during
a three-month transition period shall not be considered an interruption in the
series of payments required for loan rehabilitation.
• 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

158 For information on these waivers and modifications issued, see ED, “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. These waivers and
modifications expired on September 30, 2022; it is unclear whether they continue to remain in effect for the COVID-19
national emergency.
159 34 C.F.R. §§674.39, 682.405, 685.211(f).
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• 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 shall 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 shall 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 normally required annually 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
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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Congressional Research Service
R46314 · VERSION 15 · UPDATED
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