The CARES Act Suspends Federal Student Loan Payments

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Included in the legislation are new rules for student loan relief.

The legislation provides a six-month automatic payment suspension for any student loan held by the federal government. This six-month period ends on September 30, 2020.

If you have a federal student loan, you don’t need to contact your loan servicer to request a suspension; the six-month freeze will be applied automatically to any eligible federal student loan. However, you can choose to keep making your monthly student loan payments during the six-month suspension period if you wish.

Interest will not accrue during the six-month suspension period. In effect, the interest rate is set to 0%.

Only Federal Loans Qualify
Only student loans held by the federal government are eligible for payment suspension. This includes Direct Loans (which includes PLUS Loans), as well as Federal Perkins Loans and Federal Family Education Loan (FFEL) Program loans held by the Department of
Education. Private student loans are not eligible.

Impact on Public Service Loan Forgiveness Program
Under the Public Service Loan Forgiveness (PSLF) Program, borrowers who work in an eligible public service job and make 120 on-time student loan payments are eligible to have the remaining balance on their federal Direct Loans forgiven.

Under the CARES Act, the six-month freeze on student loan payments will not affect the 120-month running period for purposes of the PSLF program. In Other words, each month of the suspension period will still count toward a borrower’s 120 payment tally, even if the borrower does not make any payments during the six-month period.

How to Contact Your Loan Servicer
Your federal loan servicer is the company that handles your loan’s billing and provides related services. If you want to contact your loan servicer for any reason you should try to do so online or by phone. If you don’t know the name of your loan servicer or how to contact the company, you can visit or call 1-800-4-FED-AID for assistance


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This material is intended for informational purposes and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax adviser, or plan provider.