Student Loans During COVID-19 (FAQ)

Latest Updates

1. On November 22, 2022, the U.S. Department of Education (ED) extended the student loan repayment pause. Payments will resume 60 days after the lawsuits are resolved. If they are not resolved by June 30, 2023, payments will begin 60 days later. Read the press release.
2. Between November 10-14, 2022, courts issued orders temorarily blocking the student loan relief plan. This prevents the ED from canceling any debt until the lawsuits are resolved.
3. On August 24, 2022, the Biden-Harris administration and ED announced it would cancel $10,000- $20,000 of debt per borrower. Details about the plan and eligibility can be found here.

The CARES Act

Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. Under the CARES Act:

• Payment of federal student loans held by the Department of Education has been paused since March 13, 2020.
• No interest will accrue on suspended federal student loans covered by the CARES Act. 
• The suspension will be treated as if the loan payment was made for loan forgiveness and loan rehabilitation purposes.
• You should receive written communication from your loan servicer before payments restart.

The CARES suspension is different than requesting forbearance. The CARES suspension is applied automatically to all qualifying loans, but it is not known how this will be implemented.

What if I have automatic payments set up for my student loans? 

According to the Department of Education, all automatic payments will be suspended during the suspension period. If you have had a student loan payment automatically debited since March 13, 2020, you can contact your loan servicer to get the payment refunded to you. 

Does the CARES Act suspension apply to my loans? 

Generally, the CARES Act suspension applies only to federal loans held by the Department of Education. Find out if your loans qualify for the CARES suspension, or call 1-800-999-8219.

What if my loans are already in default?

As part of the COVID-19 emergency relief, eligible defaulted loans will receive these relief measures:

• Tax refunds and child tax credits will not be witheld.
• Wages will not be garnished.
• Social Security payments (including diability benefits) will not be withheld.
• Collections calls and bills will not be sent out.
• Interest will not add up.

On April 6, 2022, the U.S. Department of Education announced a new initiative called "Fresh Start" to help borrowers in default. Read more information here.

What if I have Perkins Loans? 

Prior to the CARES Act, the Department of Education approved a 60-day forbearance and suspension of interest on Perkins Loans.

What if my student loans aren’t covered by the CARES Act? 

Your student loan servicer may still be offering some relief similar to the CARES Act for people affected by Covid-19. You should contact your loan servicer to ask about your options. 

More Information

• Learn more about how the CARES Act may impact your student loan debt.

Find Community Resources

• Check out the County Resource Guide for your county to find local resources.
• Visit Montana211.org or dial 2-1-1 for help finding local resources. 

Get Legal Help

• Montana Legal Services Association provides free civil legal help to eligible clients. Learn more about how to apply for free legal help in Montana. 
• If you are eligible for Montana Legal Services Association, you may be able use Ask Karla to ask a volunteer attorney a civil legal question by email.