How Long Are Student Loans Frozen

If you’re a student loan borrower, you may be wondering how long your loans will be frozen. The answer depends on the type of loan you have.

Federal Direct Loans

The Department of Education has announced that it will freeze all new federal direct loans for the duration of the government shutdown. If you already have a federal direct loan, it’s likely that your loan will be frozen until after the shutdown ends.

Stafford and PLUS Loans

The Department of Education has announced that Stafford and PLUS loans will remain in good standing during the shutdown, but borrowers should expect delays in disbursement and servicing of their loans.

Private Student Loans

Private student loan lenders are not currently required to freeze their borrowers’ student loans. However, many private student loan lenders have begun freezing student loans as a result of the government shutdown. It’s important for borrowers to contact their lender if they have questions about their specific situation.

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The current federal student loan repayment freeze — a lifeline pausing repayments interest-free for millions of borrowers in the wake of the pandemic — is set to expire after Aug. 31, 2022.

The federal student loan freeze was first enacted in 2020 and has been extended several times, most recently in December to account for the Omicron variant of COVID-19 or effects of rising inflation.

With the no-interest repayment pause ending, you’ll want to get ready to pick your payments back up. Particularly if you have a loan in default, you should try to rehabilitate your repayment while you’re free from collections and any additional harm to your credit report.

To help you prepare, we’ll answer two questions:

How long are student loans interest-free?
What steps can you take to prepare for resuming payments?

How long are student loans interest-free?

The federal loan repayment pause, signed into law March 27, 2020, via the Coronavirus Aid, Relief and Economic Security (CARES) Act, was only supposed to last through Sept. 30, 2020. However, the resurgence of the COVID-19 crisis and its effect on the economy prompted multiple White House orders across two administrations to extend the relief program.

As mentioned, the student loan freeze is now set to expire on at the end of the day on Aug. 31.

“The payment pause has been a lifeline that allowed millions of Americans to focus on their families, health, and finances instead of student loans during the national emergency,” U.S. Secretary of Education Miguel Cardona said in a statement announcing a previous extension in August 2021.

Note that the relief is limited to student loans on the federal government’s balance sheet. Privately owned Federal Family Education Loans (FFEL), school-sourced Perkins loans and alternative loans lent by banks and other entities were excluded.

Under the current freeze, eligible borrowers’ “non-payments” still count toward requirements for forgiveness under income-driven repayment (IDR) plans and the Public Service Loan Forgiveness (PSLF) program, as well as part of loan rehabilitation agreements.

It also clarified that federal loan borrowers in default won’t see their wages garnished while the interest freeze remains in place.

As noted, the action limits temporary relief to student loans on the federal government’s balance sheet. Privately owned Federal Family Education Loans (FFEL), school-sourced Perkins loans and alternative loans lent by banks and other entities are excluded.

Fortunately, however, loans not covered by government relief could be supported by state governments and private lenders.

Here are some ways to prepare for the return of student loan repayment.

7 steps to prepare for the end of the student loan interest freeze

Staying on top of the news is the first step in preparing for the resumption of your federal loan repayment. Staring at the screen, however, will only leave you waiting, hoping for good news.

To be more proactive — and prepared for not-so-good news — consider these seven steps:

Replenish your emergency fund
Rehabilitate any loans in default
Adjust your repayment plan
Review deferment and forbearance options
Explore non-federal government support
Touch base with your loan servicer
Keep student loan refinancing on your radar

Replenish your emergency fund, if you can
If you’re wondering whether to save money or pay off debt, the answer is clear, but only through September. While the penalty-free student loan interest freeze remains in effect, refilling your rainy day fund should be a priority. This way, you’ll have a cushion in case you need to dip back into the fund to afford loan payments down the road.

Generally, it’s wise to carry three to six months’ worth of expenses in your accessible savings account. With the future of the unemployment rate uncertain, though, the more savings you sock away, the better off you’ll be.

Rehabilitate any loans in default before collections resume
The CARES Act promised an additional reprieve for federal student loan borrowers in default: a halt to collections and garnishments of wages and other monetary benefits. The Department of Education has also said it would refund $1.8 billion worth of recent seizures. (If you haven’t been made whole, learn about how this borrower retrieved her tax refund.)

To avoid such penalties in the future, strategize how to get your loans out of default. Your options for federally owned debt include the following:

What to know Pros and cons
Rehabilitation ● Make nine payments within 10 months, with the payment amount equal to 15% of your discretionary income ● Monthly payment amount could be as low as $5, depending on your income
● Collections could continue until you’ve made all nine payments
● Removes the record of your default from your credit history, likely boosting your credit score
● Rehabilitation is a one-time opportunity
Direct loan consolidation ● Consolidate one or more federal loans into a new loan. You can agree to repay it on an income-driven repayment plan, or else make three straight, timely payments before consolidation occurs ● Consolidation not possible until wage garnishment is lifted
● Won’t immediately remove the default from your credit report
Payment in full ● If you have the cash to do it, zero out your balance ● Not practical for most borrowers

Adjust your repayment plan or monthly dues, if necessary
Enrolling in an income-driven repayment plan could make your payments more affordable once the student loan freeze ends. IDR plans limit your monthly dues to 10% to 20% of your discretionary income. They also account for your family size.

And you don’t have to wait until January or February to enroll. In fact, you can review your IDR options at any time — the government’s loan simulator tool could help you decide. After choosing the best repayment option for your situation, you can apply in 10 minutes, free of charge.

If you’re already repaying your debt via an IDR but have seen a decrease in household earnings (or an increase in family size), you could recalculate your monthly dues via studentaid.gov.

Review other options to pause repayment
The federal government’s special administrative forbearance isn’t the only way to press pause on your repayment. There are all sorts of deferment and forbearance options, including:

Duration Eligibility
Unemployment deferment Up to three years If you’re out of work
Economic hardship deferment Up to three years If you’re receiving welfare benefits, earning especially low income or serving in the Peace Corps
General forbearance Up to 12 months at a time for a maximum of three years Granted at your loan servicer’s discretion based on your financial challenges, medical expenses, employment or other factors
Student loan debt burden forbearance Up to 12 months at a time for a maximum of three years If your monthly federal loan dues are greater than 20% of your gross income
Unlike the special administrative forbearance awarded to most federal loan borrowers in March, the above options…

…must be applied for and are never automatically granted.
…accrue and capitalize interest in most cases, except on subsidized loans and Perkins loans during a deferment.
…can be reported to the credit bureaus and possibly affect your credit score.

Explore non-federal forms of loan relief
When the federal loan suspension ends, other support options will still exist.

So, if IDR and interest-accruing postponements like deferment and forbearance aren’t enough — or if you have private student loans to tend to, as well — consider the following moves:

Seek out state government student loan aid
Write to your elected representatives when these local programs aren’t enough
Talk to your employer about student loan relief benefits
Along the way, be wary of coronavirus-related student loan scams promising help for a fee

Maintain communication with your loan servicer
If you don’t remember the last time you checked in on your debt repayment options, track down your federal loan servicer, and ask for assistance when you need it.

While you’re at it …
Ensure your servicer has your up-to-date contact information. With a first round of federal loan servicing contracts set to expire by the end of 2021 — and a host of new loan servicers coming aboard — your debt could be transferred.
This advice goes for private student loan relief, too. It never hurts to ask your bank, credit union or online lender for support.

A Student Loan Hero survey in June 2020 found that 70% of private loan borrowers who asked for lender support were successful in receiving it. Whether you’re offered modified repayment terms or a lower monthly payment, you might be surprised by a lender’s generosity.

Consider student loan refinancing in early 2022
With the federal government picking up the tab on your student loan interest (at least for now), it makes little sense to refinance your education debt to a lower interest rate. No bank can beat Uncle Sam’s current offering of 0%.

With that said, the student loan interest freeze isn’t forever. When your rates return to their normal levels in February, it could make sense to refinance federal loans. After all, private lenders are also offering very low interest rates in this pandemic-affected economic environment.

Just be sure you won’t miss federal loan protections — like access to IDR, deferment and forbearance and forgiveness programs — before you make the irreversible decision to refinance.

student loan forgiveness

If you are employed by a U.S. federal, state, local, or tribal government or not-for-profit organization, you might be eligible for the Public Service Loan Forgiveness Program. Keep reading to see whether you might qualify.

To ensure you’re on the right track, you should submit a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF Form) annually or when you change employers. We’ll use the information you provide on the form to let you know if you are making qualifying PSLF payments. This will help you determine if you’re on the right track as early as possible.

*This provision will be waived through October 31, 2022 as part of the limited PSLF waiver. Learn more.

Suspended Payments Count Toward PSLF and TEPSLF During the COVID-19 Administrative Forbearance

If you have a Direct Loan and work full-time for a qualifying employer during the payment suspension (administrative forbearance), then you will receive credit toward PSLF or TEPSLF for the period of suspension as though you made on-time monthly payments in the correct amount while on a qualifying repayment plan.

To see these qualifying payments reflected in your account, you must submit a PSLF form certifying your employment for the same period of time as the suspension. Your count of qualifying payments toward PSLF is officially updated only when you update your employment certifications.

Digital signatures from you or your employer must be hand-drawn (from a signature pad, mouse, finger, or by taking a picture of a signature drawn on a piece of paper that you then scan and embed on the signature line of the PSLF form) to be accepted. Typed signatures, even if made to mimic a hand-drawn signature, or security certificate-based signatures are not accepted.

Note: In-grace, in-school, and certain deferment, forbearance, and bankruptcy statuses are not eligible for credit toward PSLF.

Have questions? Find out what loans qualify and get additional information about student loan flexibilities due to the COVID-19 emergency.

Qualifying Employer

Qualifying employment for the PSLF Program isn’t about the specific job that you do for your employer. Instead, it’s about who your employer is. Employment with the following types of organizations qualifies for PSLF:

Government organizations at any level (U.S. federal, state, local, or tribal) – this includes the U.S. military
Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment for the PSLF Program.

The following types of employers don’t qualify for PSLF:

Labor unions
Partisan political organizations
For-profit organizations, including for-profit government contractors

Contractors: You must be directly employed by a qualifying employer for your employment to count toward PSLF. If you’re employed by an organization that is doing work under a contract with a qualifying employer, it is your employer’s status—not the status of the organization that your employer has a contract with—that determines whether your employment qualifies for PSLF. For example, if you’re employed by a for-profit contractor that is doing work for a qualifying employer, your employment does not count toward PSLF.

Other types of not-for-profit organizations: If you work for a not-for-profit organization that is not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, it can still be considered a qualifying employer if it provides certain types of qualifying public services.

Full-time Employment

For PSLF, you’re generally considered to work full-time if you meet your employer’s definition of full-time or work at least 30 hours per week, whichever is greater.

If you are employed in more than one qualifying part-time job at the same time, you will be considered full-time if you work a combined average of at least 30 hours per week with your employers.

If you are employed by a not-for-profit organization, time spent on religious instruction, worship services, or any form of proselytizing as a part of your job responsibilities may be counted toward meeting the full-time employment requirement.

Eligible Loans

Any loan received under the William D. Ford Federal Direct Loan (Direct Loan) Program qualifies for PSLF.

Loans from these federal student loan programs don’t qualify for PSLF: the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan (Perkins Loan) Program. However, they may become eligible if you consolidate them into a Direct Consolidation Loan.

Student loans from private lenders do not qualify for PSLF.

Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver.

student loan forgiveness program

In certain situations, you can have your federal student loans forgiven, canceled, or discharged. Learn more about the types of forgiveness and whether you qualify due to your job or other circumstances.

Types of Forgiveness, Cancellation, and Discharge

The summaries below offer a quick view of the types of forgiveness, cancellation, and discharge available for the different types of federal student loans.

The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

PSLF Resources

Public Service Loan Forgiveness (PSLF) Help Tool
Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application
Limited PSLF Waiver Information
Public Service Loan Forgiveness Program FAQ
Submit a Public Service Loan Forgiveness Reconsideration Request

Qualifying for PSLF

To qualify for PSLF, you must

be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
work full-time for that agency or organization;
have Direct Loans (or consolidate other federal student loans into a Direct Loan);
repay your loans under an income-driven repayment plan*; and
make 120 qualifying payments.

To ensure you’re on the right track, you should submit a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF Form) annually or when you change employers. We’ll use the information you provide on the form to let you know if you are making qualifying PSLF payments. This will help you determine if you’re on the right track as early as possible.

*This provision will be waived through October 31, 2022 as part of the limited PSLF waiver.

Suspended Payments Count Toward PSLF and TEPSLF During the COVID-19 Administrative Forbearance

Note: In-grace, in-school, and certain deferment, forbearance, and bankruptcy statuses are not eligible for credit toward PSLF.

Have questions? Find out what loans qualify and get additional information about student loan flexibilities due to the COVID-19 emergency.

Qualifying Employer

Government organizations at any level (U.S. federal, state, local, or tribal) – this includes the U.S. military
Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment for the PSLF Program.

The following types of employers don’t qualify for PSLF:

Labor unions
Partisan political organizations
For-profit organizations, including for-profit government contractors

Full-time Employment

For PSLF, you’re generally considered to work full-time if you meet your employer’s definition of full-time or work at least 30 hours per week, whichever is greater.

If you are employed in more than one qualifying part-time job at the same time, you will be considered full-time if you work a combined average of at least 30 hours per week with your employers.

Eligible Loans

Any loan received under the William D. Ford Federal Direct Loan (Direct Loan) Program qualifies for PSLF.

Student loans from private lenders do not qualify for PSLF.

Qualifying Payments

A qualifying monthly payment is a payment that you make

after Oct. 1, 2007;
under a qualifying repayment plan;
for the full amount due as shown on your bill;
no later than 15 days after your due date; and
while you are employed full-time by a qualifying employer.

Most of the PSLF qualifying payment rules have been suspended through October 31, 2022. Under this temporary waiver, you may get credit for payments you’ve made on loans that would not normally qualify for PSLF. These payments will count even if you didn’t pay the full amount or on-time. However, only payments made after Oct. 1, 2007 can count as qualifying payments. For more information, visit the limited PSLF waiver page.

You can make qualifying monthly payments only during periods when you’re required to make a payment. Therefore, you can’t make a qualifying monthly payment while your loans are in

an in-school status,
the grace period,
a deferment, or
a forbearance.

If you want to make qualifying payments, but you’re in a deferment or forbearance, contact your federal student loan servicer to waive the deferment or forbearance. However, you can still receive credit toward PSLF during the COVID-19 payment pause.

Your 120 qualifying monthly payments don’t need to be consecutive. For example, if you have a period of employment with a nonqualifying employer, you will not lose credit for prior qualifying payments you made.

The best way to ensure that you are making on-time, complete payments is to sign up for automatic debit with your loan servicer.