There’s a light at the end of the tunnel of the coronavirus pandemic, but that doesn’t change the fact that many people across the U.S. have been struggling with a reduction in income. The good news is that there are still policies in place to help people financially weather the crisis, including programs that can help borrowers suspend student loan payments.

If you’re concerned about making your next payment on a federal or private student loan due to the coronavirus, read on to see your options.

How COVID-19 has affected student loans

Student loans were one of the first areas to be addressed when the pandemic hit. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March 2020, allowed borrowers to suspend payments on federal student loans, automatically waived interest on those loans and suspended collection attempts, wage garnishments and tax refund seizures on defaulted federal student loans.

This relief was due to last only six months, but it has been extended multiple times. Currently, federal student loan payments, interest charges and collections activities are waived through Dec. 31, 2022.

Which student loans are affected?

Only student loans held by the federal government and defaulted Federal Family Education Loan (FFEL) Program loans are eligible for the moratorium on payments, interest and collections. Noncovered federal loans include federal Perkins Loans held by individual colleges and universities, as well as older loans under the FFEL Program that are held by private companies and are in good standing.

Eligible loans include:

  • Direct Loans owned by the U.S. Department of Education.
  • FFEL Program loans owned by the U.S. Department of Education.
  • Federal Perkins Loans owned by the U.S. Department of Education.
  • Defaulted FFEL Program loans managed by guaranty agencies.
  • Defaulted HEAL loans owned by the U.S. Department of Education.

What if you’re pursuing PSLF?

The Public Service Loan Forgiveness (PSLF) program requires that applicants make 120 qualifying monthly payments, among other requirements, to get approved.

Fortunately, borrowers pursuing PSLF don’t have to worry about making payments during this time. The stimulus package included a provision to count suspended payments during the moratorium period toward PSLF eligibility — so even if you skip payments through December, each month will be counted as though you made a payment toward PSLF as long as you work full time for an eligible employer during that time.

Additionally, the Biden administration made an overhaul to the PSLF program to make it easier for eligible borrowers to qualify for forgiveness. In October, the Department of Education announced a limited PSLF waiver that will allow more types of payments to be eligible for the program. If you want to take advantage of the waiver, you’ll need to submit a PSLF form by Oct. 31, 2022. If you have FFEL, Perkins or other non-Direct Loans, you’ll also need to consolidate your loans by that date.

Here are some other changes to the program:

  • Active-duty service members can count deferments and forbearances toward PSLF.
  • Military service members and federal employees will be automatically given credit using federal data matches.
  • Late payments and partial payments will count toward PSLF.
  • Payments made prior to consolidation will count toward PSLF.
  • Denied PSLF applications will be reviewed for errors, and borrowers will be able to have their determinations reconsidered.

Are private student loans suspended?

Private student loans aren’t eligible for student loan COVID-19 relief, because the federal government doesn’t hold those loans. However, on the heels of the CARES Act, several private lenders and loan servicers offered various relief options, such as special 90-day COVID-19 forbearances.

Whether or not those programs are still available depends on the lender and your situation. Here’s how you can request help.

  1. Call your loan servicer: When you call or email your loan servicer, explain your financial situation and how you’ve been impacted by this crisis. For example, you or your partner may have been laid off or furloughed, or you might have concerns about your future ability to make your student loan payments. Tell your lender when you anticipate being able to resume loan payments.
  2. Ask about assistance programs: Your options will depend on the servicer and your individual situation. For example, your loan servicer may offer to suspend payments for a few months, temporarily lower your interest rate or offer interest-only payments. Some servicers are treating each situation on a case-by-case basis.
  3. Ask questions: Before agreeing to start the program, confirm the exact terms, such as fees involved, how long the relief lasts and whether interest accrues. You also should find out whether that interest “capitalizes” — gets added to the unpaid principal balance. Create a plan for how you’ll resume payments at the end of the forbearance period.
  4. Enroll in your loan servicer’s program: Ask for the details in writing and complete the process to enroll in your loan servicer’s program. Make sure that you receive confirmation that you’ve been enrolled before you stop making payments.
  5. Consider refinancing: With current low interest rates, borrowers may be able to save money by refinancing private student loans. Shop around for the best rate if you’re considering this move. Refinancing can help you save a substantial amount of money if you can shave a percentage point or two off your current interest rate. It can also help if the new lender offers more flexible hardship options than your current lender.

Keep in mind that enrolling in plans that suspend or lower payments ultimately extends the life of the loan, which costs you more in interest overall. If you can afford to keep making payments as scheduled, it may be in your best interest to do so.

Private student loan lenders offering relief

Below is a list of private lenders that are offering some kind of relief to borrowers as of Jan. 19, 2022. If your lender is not listed here, we recommend checking your lender’s website or reaching out by phone.

  • Citizens Bank says that private student loan borrowers can call the bank at 866-259-3767 to get information about their options.
  • College Ave says that borrowers may be eligible for its forbearance program. To see if you’re eligible to apply, call College Ave at 844-803-0736. It is not able to process requests via email or chat.
  • CommonBond borrowers can apply for natural disaster forbearance, which won’t count toward standard forbearance limits. The online lender is waiving late fees and allowing private student loan borrowers to postpone payments in one-month increments through the end of the national emergency declaration. Loans will continue accruing interest, but you won’t pay fees to join the program.
  • Discover private student loan borrowers can call the bank at 800-788-3368 to discuss hardship options.
  • Earnest borrowers can apply for a short-term forbearance program via Earnest’s email portal. Entering this program makes your eligible loans current and also postpones payments for at least one month. Interest accrues while your payments are postponed, but it won’t be capitalized at the end of forbearance.
  • Laurel Road private student loan borrowers who are financially impacted by the coronavirus may be eligible for a forbearance of three payments, then for another three payments if they’re still struggling. To see if you are eligible, reach out to MOHELA, which services Laurel Road’s loans. Call 877-292-6845 to discuss hardship relief options, including forbearance or an extension. Interest during a forbearance will continue to accrue, and your monthly payment will be recalculated at the end of the forbearance.
  • LendKey, which partners with banks and credit unions to help borrowers refinance student loans, says that borrowers may submit a forbearance application in their online account or reach out to care@lendkey.com. You may also call your loan servicer with questions and to discuss hardship options.
  • Navient says that qualified private student loan borrowers may be eligible for a rate-reduction program, interest-only payments or an extended repayment plan. To see if you are eligible, contact Navient at 888-272-5543.
  • Sallie Mae borrowers can chat with the lender about private student loans online or by calling 833-558-6577 to see what assistance options may make sense for them.

Should I refinance my student loans now?

Student loan refinance interest rates plunged to record lows in 2020 and 2021, prompting some borrowers to wonder if it’s worth it to refinance. If you have private student loans, you don’t have to worry about some of the drawbacks, so it may be a no-brainer if you can get better terms than what you have now.

But if you have federal loans, you’ll want to think twice, at least until current coronavirus relief measures expire.

Pros of refinancing

  • Refinancing could help you qualify for a lower interest rate than what you currently have.
  • You’ll have flexibility with your repayment options, with terms ranging from five to 20 years.
  • You can choose a new lender based on the features you want and your repayment goals.

Cons of refinancing

  • If you refinance federal student loans, you’ll lose access to the coronavirus payment suspension period.
  • Refinancing federal student loans causes you to lose other federal benefits, including access to forgiveness programs and income-driven repayment plans.
  • You typically need a high credit score and income to qualify for the best rates, so there’s no guarantee that you’ll get a better arrangement than what you have now.

The bottom line

While federal student loans continue to have loan payments suspended, collections stopped and interest waived during the pandemic, many private student loan lenders are also providing options.

If you are experiencing economic or other hardship due to the coronavirus crisis, know that you do have options. The first step is reaching out to your student loan lender or servicer to see what options are available to you.

And remember, even if you can take advantage of a forbearance program, it usually doesn’t make sense unless you need to. Going into forbearance will extend the length of your loan, and it may cause you to pay additional interest over the course of your loan.