Information for Student Loan Borrowers
Federal Student Loans
- Payments suspended: The Department of Education has extended the suspension of payments on government-held federal student loans and the suspension through August 31, 2022.
- Collections suspended: The Department of Education has extended suspension of collection on defaulted federal student loans, including wage garnishment and withholding of tax refunds, through August 31, 2022.
- The suspension of payments and collections applies to all Direct Loans and to those Federal Family Education Loan (FFEL) loans held by the federal government. (If you have FFEL loans held by a commercial lender, see the next section.)
- If any of your loans are eligible for these suspensions, you should have received a notice in April 2020.
- The CARES Act, passed in March 2020, gives borrowers of government-held federal loans several additional benefits. The CARES Act:
- Waives all interest on eligible loans during the suspension of payment period.
- Permits eligible borrowers who are on track for loan forgiveness or loan rehabilitation to count the months of suspension as eligible payments for the purpose of the loan forgiveness or rehabilitation program.
- Ensures that no negative credit information will be provided to Credit Reporting Agencies during the suspension in connection with eligible loans.
- Suspends collection actions for eligible federal loans, including wage garnishment and reduction of tax refunds and other government benefits, until September 30, 2020 (the Department of Education has since extended the suspension on collection through August 31, 2022).
- Call your servicer to confirm which of your loans are covered by the CARES Act and to ask what relief options are available for loans that are not covered. You can also call the Department of Education at 1-800-4-FED-AID or 1-800-999-8219.
Private Loans and Commercially-held FFEL Loans
The CARES Act benefits are not available for FFEL loans that are owned by commercial lenders or private student loans. However, help may still be available for these kinds of loans.
For commercially held FFEL loans and private student loans, the CARES Act does not apply and you should call your servicer to ask what options are available.
Most servicers have already agreed to provide some additional help for New York borrowers who ask for it and they are expecting your call. For most New York borrowers, you can expect the following:
- Up to 90 days of payment forbearance (however, interest may accrue during the forbearance)
- Waived late fees
- Your loan will not be sent to collections if you are behind
- No negative credit reporting
These benefits will not be provided automatically, so call your servicer if you need help. Keep records of your calls (time, date, who you spoke with).
Additionally, if any of your loans are commercial FFEL loans, you may want to consider enrolling in an income-driven repayment plan. An income-driven repayment plan bases your payments on your income, which may result in lower monthly payments and will enable borrowers to work toward eventual loan forgiveness. If your income is low enough, your payment on those loans may be as low as $0/month.
If you are already enrolled in an income-driven repayment plan and your income has dropped for whatever reason, you are entitled to apply to have your monthly payment adjusted. Most commercial FFEL loans are eligible for an income-driven repayment plan even though the CARES Act does not apply to them. For more information, visit the U.S. Department of Education.
Perkins Loans are not eligible for CARES Act relief, but Perkins Loans that are held by the government are eligible for a 60-day forbearance, with zero interest accruing. This relief may not be available for Perkins loans held by your school. Contact your servicer to find out what relief is available for your Perkins loans.
If you owe New York State debt related to your education (for example, unpaid tuition or a loan from the state), collections are temporarily suspended through December 31, 2021.
Frequently Asked Questions on relief for student loan borrowers:
Who is eligible for the benefits available under the CARES Act?
The CARES Act only applies to federal student loans that are held by the federal government. This includes all Direct Loans and those Federal Family Education Loan (FFEL) loans that are held by the federal government. If any of your loans are eligible, you should receive a notice describing the CARES Act benefits by April 11, 2020.
The CARES Act benefits are not available for FFEL loans that are owned by commercial lenders, Perkins loans, or private student loans. However, help may still be available for these kinds of loans. See above for more information.
If you are not sure what types of loan you have, contact your servicer to find out. If you don’t know who your servicer is, for federal student loans, you can find your servicer by visiting the U.S. Department of Education website. For private student loans, look at your latest billing statement or check your credit report. Even if your loans don’t qualify for relief under the CARES Act, some help will be available for most borrowers if they call their servicers.
What if I am working towards Public Service Loan Forgiveness (PSLF) or forgiveness under an income-driven repayment plan?
For borrowers covered by the CARES Act, if the payment you would have made in a month would otherwise have counted towards forgiveness, the suspended payment will count towards forgiveness. In other words, you do not need to make payments during the CARES Act period to keep progressing towards forgiveness.
Borrowers with commercial FFEL loans not covered by the CARES Act who are working towards forgiveness under an income-driven repayment plan will need to continue to make payments, rather than take forbearance, if they want those months to count towards forgiveness. However, if you are such a borrower and your income has dropped, you are eligible to apply immediately to have your monthly payment recalculated. Even if your payment drops to $0 a month as a result, it will still count towards forgiveness.
What about income-driven repayment plans?
Federal loan borrowers whose loans are eligible for the CARES Act may also want to consider enrolling in an income-driven repayment plan. An income-driven repayment plan bases your payment amount on your income, which may result in lower monthly payments, and will enable borrowers to work toward eventual loan forgiveness. Depending on your income, your payment may be as low as $0/month, even after CARES Act benefits expire. Therefore, even if payments on your loans are suspended, it may still be worth it to you to apply for an income-driven repayment plan.
If you are already enrolled in an income-driven repayment plan, your eligible loans will still receive all CARES Act benefits. If your income has dropped for any reason, you are also entitled to apply immediately to have your monthly payment adjusted (though you will still not need to make payments until after your CARES Act benefits expire).
Borrowers with commercial FFEL loans may also benefit from applying for an income-driven repayment plan, even though those loans are not eligible for CARES Act benefits. See the section on Private Loans and Commercially-held FFEL Loans, above.
For more information on eligibility and the benefits of such plans, visit the U.S. Department of Education.
What should I do if I think my servicer is not giving me the relief I’m entitled to?
If you have determined the types of loans you have, reviewed this information and the information at the Department of Education’s website carefully, and believe that your servicer is denying you relief to which you are entitled, you may submit a complaint to our office.
Information on Relief for College Students
The CARES Act provides several forms of relief to currently enrolled college students.
- The Act establishes the Higher Education Emergency Relief Fund (HEERF), which disburses funds to colleges. Colleges are required to use a portion of these funds to provide emergency financial aid grants to students for expenses related to the disruption of campus operations due to coronavirus.
- The Act provides relief to college students who are forced to drop out of school as a result of the COVID-19 crisis. This relief ensures that the student’s withdrawal does not affect the student’s future ability to qualify for federal grants and loans.
HEERF emergency financial aid grants are available to:
- HEERF emergency financial aid grants are administered and disbursed by the students’ schools and are available to students who are otherwise eligible for federal financial aid.
- Eligibility requirements include: U.S. citizenship or eligible noncitizen status; a valid Social Security number; registration with Selective Service (if the student is male); and a high school diploma, GED, or completion of high school in an approved homeschool setting.
- Students who are enrolled in online-only educational programs are not eligible for HEERF grants.
How students can obtain HEERF emergency financial aid:
- Students should contact their school for information about how to apply for a HEERF emergency financial aid grant.
- Students should direct questions about other types of CARES Act relief for students to their school or to the U.S. Department of Education at 1-800-4-FED-AID or 1-800-999-8219.
Other CARES Act relief for college students:
- Students’ eligibility for Pell Grants will not be affected by their non-completion of a semester due to the COVID-19 crisis.
- If a student is forced to withdraw mid-semester due to the COVID-19 crisis, that semester will not be counted for purposes of usage limitations for subsidized federal student loans.
- Schools can continue to pay work-study students who cannot complete work hours as a result of the crisis.
- For students who withdraw mid-semester due to the crisis, the unused part of the students’ Pell grants will not be collected, and the students’ obligation to repay the portion of the loan associated with the period where the student withdrew from the school will be cancelled.