The Federal COVID-19 relief for student loans is ending this year. Student loan interest resumed September 1, 2023, and payments will be due starting October 2023. The Department of Education will communicate with borrowers from now until their first payment due date. This Student Loan Repayment Toolkit provides helpful information to help borrowers prepare to begin student loan repayment.
The federal government has created or expanded several programs to help current and former college students with their federal student loans. Learn more about the programs below so you can apply now!
Student Loan Debt Relief | Public Service Loan Forgiveness | Fresh Start Initiative
Student Loan Debt Relief
On June 30th the Supreme Court issued a decision invalidating the Biden-Harris Administration’s Student Debt Relief plan following a legal challenge by Republican state officials. This decision from the Supreme Court means that the Administration can no longer move forward with the one-time student debt relief plan announced last year. While the Biden-Harris Administration disagrees with the decision, they have announced three actions to help provide relief to borrowers:
- First, the Biden-Harris administration are taking action aimed at opening an alternative path to debt relief for working and middle-class borrowers. They have started the process to provide relief to as many people as they can, through rulemaking. Under the law, this path will take time, but they stated, “they are determined to keep fighting for borrowers” and will keep you updated in the months ahead.
- Second, the Administration is releasing the details of the most affordable repayment plan ever created, called the Saving on a Valuable Education (SAVE) Plan. Later this summer, borrowers will start saving money under the new plan, which will cut monthly payments to $0 for millions of borrowers making $32,800 or less ($67,500 for a family of four) and save all other borrowers at least $1,000 per year. Additionally, it will stop runaway interest that leaves borrowers owing more than their initial loan.
- Third, to help borrowers back into repayment, the administration is creating a temporary “on-ramp” to repayment for one year for those struggling to make payments. For borrowers who still cannot make their payments, they are creating a temporary “on-ramp” period that will help borrowers avoid the harshest consequences of missed, partial, or late payments. During that time, missed, partial, or late payments will not lead to negative credit reporting, default, or loans being sent to collection agencies. Borrowers who can make payments should do so, as payments will be due and interest will accrue during this transition period. Additionally, missed payments will not count toward loan forgiveness under any of the income-driven repayment plans or Public Service Loan Forgiveness.
June 30, 2023
Last day of federal student loan payment pause
December 31, 2023
The last day to apply before application closes
Public Service Loan Forgiveness
Public Service Loan Forgiveness (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.
To qualify for PSLF, you must:
- Be employed by a federal, state, local, or tribal government or not-for-profit organization;
- 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
For more information, visit PSLF FAQ.
If your questions aren’t covered on that page, contact MOHELA at 1-855-265-403
Frequently Asked Questions
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. Use our employer search tool to help determine if your employer qualifies for PSLF
- 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.
The following types of employers don’t qualify for PSLF:
- Labor unions
- Partisan political organizations
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.
Any loan received under the William D. Ford Federal Direct Loan (Direct Loan) Program qualifies for PSLF.
Loans from these Direct Loan programs don’t qualify for PSLF:
- 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. What counts as a qualifying payment?
- 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
Use the PSLF Help Tool for all of the following:
- Check to see if your employer qualifies
- Certify your employment each year
- Apply for forgiveness once you’ve met all the requirements
- Generate your PSLF form for signing and submitting to the PSLF servicer
To learn more about PSLF, please visit Public Service Loan Forgiveness
Fresh Start Initiative
The Department of Education is helping student loan borrowers who are in student loan delinquency or student loan default get a fresh start on their student loans after student loan payment pause through December 31, 2022 is lifted. Under the Fresh Start Program, borrowers whose federal student loans were delinquent or in default prior to the pandemic will be able to re-enter repayment in good standing.
For more information, visit Fresh Start for Federal Student Loan Borrowers in Default.
If you are not sure whether your loans qualify, you can call the Default Resolution Group at 1-800-621-3115 (TTY for the deaf or hard of hearing 1-877-825-9923)
Frequently Asked Questions
The first day after you miss a student loan payment, your loan becomes past due, or delinquent. Your loan account remains delinquent until you repay the past due amount or make other arrangements, such as deferment or forbearance, or changing repayment plans.
If your loan continues to be delinquent, the loan may go into default. The point when a loan is considered to be in default varies depending on the type of loan you received.
For a loan made under the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan Program, you are considered to be in default if you do not make your scheduled student loan payments for at least 270 days.
For a loan made under the Federal Perkins Loan Program, the holder of the loan may declare the loan to be in default if you do not make your scheduled payment by the due date.
- Defaulted William D. Ford Federal Direct Loan (Direct Loan) Program loans
- Defaulted Federal Family Education Loan (FFEL) Program loans (both ED-held and commercial-held)
- Defaulted ED-held Perkins Loans
Loans not eligible for Fresh Start:
- Defaulted school-held Perkins Loans
- Defaulted Health Education Assistance Loan Program loans
- Student loans remaining with the U.S. Department of Justice (DOJ)
- Direct Loans and commercial-held FFEL Program loans that default after the end of the pause on student loan payments and collections
