Payment Pause and Debt Relief
Due to the economic challenges created by the pandemic, the federal government has extended the student loan repayment pause a number of times during which time no one with a federally held loan has had to make loan payments or accrue interest. To ensure a smooth transition to repayment and prevent unnecessary defaults, the federal government announced these extensions during which time payments are automatically paused, interest free, with no opt-in request needed. Most recently announced on November 22, 2022:
Payments will resume 60 days after the Department is permitted to implement the [student loan debt relief] program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current Term. If the [student loan debt relief] program has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that.
As the end of the pause approaches, student loan borrowers should plan accordingly and work with their student loan servicer regarding eligibility for debt relief and/or plans to begin making student loan payments again at some point. It is important to plan accordingly and make required payments so you can avoid student loan delinquency and default.
Student Loan Debt Relief to Low- and Middle-Income Borrowers
To smooth the transition back to repayment and help borrowers at highest risk of delinquencies or default once payments resume, the U.S. Department of Education announced it will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers with income less than $125,000 (or $250,000 for households) may qualify. On October 17, 2022, the U.S. Department of Education officially announced the launch of the student loan debt relief application at studentloans.gov/debtrelief. Note: Student loan debt relief is currently blocked by the courts. Visit studentloans.gov/debtrelief for updates.
Identifying Your Loan Servicer
A loan servicer is a company that is contracted with the federal government to handle the billing and other services on federal student loans held by the U.S. Department of Education. You can find out who your loan servicer is on your account dashboard by logging into studentaid.gov or calling the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243. You can also see a list of contracted federal loan servicers and their contact information on the Federal Student Aid website.
If you borrowed a Perkins Loan (which is not held by the U.S. Department of Education), the school from which you borrowed the loan is your loan servicer. If you borrowed the Perkins Loan at the University of Nebraska-Lincoln, visit the Office of Student Accounts website for more information.
A Fresh Start for Federal Student Loan Borrowers in Default
On April 6, 2022, the U.S. Department of Education (ED) announced an initiative—called “Fresh Start”—to help eligible borrowers in default. Fresh Start will continue through one year after the COVID-19 payment pause ends. If your loans are eligible, you’ll temporarily regain several student aid and credit reporting benefits. You’ll also get the opportunity to get out of default and keep those benefits for the long term. For more information about this program and how to qualify visit studentaid.gov.
Visit the Federal Student Aid COVID-19 Emergency Relief page for more information about student loan repayment, student debt relief, and any other details and frequently asked questions.