Covid-19 student loan relief, including the payment pause and 0% interest, ended on September 1, 2023, with payments resuming in October 2023. There is no specific, ongoing "Covid student loan forgiveness" program; however, borrowers may still qualify for forgiveness through existing programs like Public Service Loan Forgiveness (PSLF) or income-driven repayment plans.
Make sure you qualify
Use the PSLF Help Tool to figure out your next steps. This tool is provided by the U.S. Department of Education (ED) and is free to use. Submit the forms suggested by the PSLF Help Tool to document your qualifying employment and receive credit for your monthly payments.
No, it is a loan, they are not forgiven.
The U.S. Department of Education's COVID-19 relief for federal student loans is ending. Federal student loan interest resumed on September 1, 2023, and payments restart in October 2023.
As of May 24, 2024, SBA had forgiven over 10.5 million PPP loans, totaling over $750 billion, 37,938 of which (totaling approximately $4.6 billion) had an open hold code 70 (potential clawback).
You qualify for student loan forgiveness through specific federal programs like Public Service Loan Forgiveness (PSLF) for government/non-profit workers, Income-Driven Repayment (IDR) Forgiveness after 20-25 years, and targeted relief for defrauded students (Borrower Defense) or the totally and permanently disabled, with new Biden-era rules also helping long-term borrowers, those with significant balance growth, or those who didn't finish school. Eligibility hinges on having federal loans and meeting specific work, payment, or circumstance requirements.
Potential benefits of lowering your payments
Lowering your monthly mortgage payment by refinancing to a lower rate or extending your loan term can make it easier to pay your mortgage on time every month while also possibly covering your other debts and expenses.
PPP loan forgiveness
Borrowers may be eligible for Paycheck Protection Program (PPP) loan forgiveness.
If you can't pay back your EIDL loan, the SBA can seize collateral, garnish wages (up to 15%), offset federal payments (like tax refunds), damage your credit, and take legal action, potentially leading to lawsuits and loss of business or personal assets, with the debt transferred to the Treasury Department for collection, which has significant enforcement powers.
Under the CARES Act, borrowers are entitled to request an initial forbearance of their monthly mortgage payments for up to 180 days, and may request up to an additional 180 days. be paid back over time. Servicers should educate the borrower on what options will be available to the borrower to make repayments.
Borrowers qualify for loan forgiveness if they use at least 60% of the funds for payroll costs between 8 and 24 weeks after the loan disbursement date. A loan forgiveness application must be submitted before the maturity date of the loan, which is either two or five years from the date the loan originated.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
As of January 1, 2022, SBA stopped accepting applications for new COVID-19 EIDL loans or advances.
The #1 most common FAFSA mistake is leaving fields blank, followed closely by name/Social Security Number mismatches, but other major errors include incorrect marital/parental info, not reading questions carefully (especially "you" vs. "parent"), and filing late or not at all. You must complete all questions, entering '0' or 'N/A' if applicable, use exact legal names, and ensure accurate SSNs to avoid delays or rejections, with many sources highlighting the importance of filing on time for maximum aid.
The best way to pay off student loans involves a combination of strategies: pay more than the minimum, use the avalanche method (highest interest first) for savings or snowball method (smallest balance first) for motivation, automate payments to save on interest, consider refinancing for lower rates (federal loans lose benefits), and explore federal income-driven plans (IDRs) or Public Service Loan Forgiveness (PSLF) if eligible. Budgeting, increasing income, and tackling extra payments with bonuses or refunds also significantly speed up repayment.
During his time in office, President Trump provided temporary COVID-19 relief by pausing federal student loan payments and interest, later extending it, but also signed legislation (the "Big Beautiful Bill") that capped borrowing for grad students, altered repayment options, and made Public Service Loan Forgiveness (PSLF) harder, leading to increased scrutiny and potential garnishments for defaulted loans under his administration's later actions, notes CNN, WPR, NPR, PBS, Yahoo Finance, Student Loan Borrower Assistance, and The New York Times.
Only federal student loans with an outstanding balance as of June 30, 2022, are eligible. Students who are enrolling after June 30, 2022 and who have loans with first disbursements after June 30, 2022 are not eligible for this forgiveness.