Federal Loan Repayment: Where You Stand in 2022

Since the start of the pandemic back in early 2020, Federal Student Loan repayments have been in a constant state of flux. The much-needed emergency measures taken over the last two years have relieved borrowers, but they’ve also caused much confusion. To help Financial Aid borrowers understand where they are now, FAS breaks down all the changes and how they affect you.

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Initial Changes to Student Loan Repayment for COVID-19:


In March 2020, the Department of Education announced that all student loan repayments would be put on hold with an interest rate of 0% for at least 60 days. Following this, the Trump administration announced the CARES Act, which suspended monthly payments and interest due to COVID-19 through September 2020 and was later applied through December 31, 2022, and again extended through January 31, 2021.

How Have These Changes Evolved?


In January 2020, the Department of Education again announced an extension of interest, payment, and collections through September 30, 2021. Later in March, they announced a suspension through the end of the COVID-19 emergency. The Department of Education also announced its protection of FFEL program borrowers, which affected nearly 1.14 million people. In December, Federal Student Loan interest, payment, and collections were suspended again through May 1, 2022.

Where Are We Now?

In August 2022, the Biden-Harris Administration announced their Student Debt Relief Plan—and for working and middle-class federal loan borrowers, things are looking good. The three-part plan aims to assist in transitioning back to regular payments as pandemic-related support expires and loan forgiveness of up to $20,000.

Here’s a breakdown:

Part 1:

Due to pandemic-related economic challenges, a final extension of student loan repayments has been extended through December 31, 2022. This means all federal student loan payments will resume in January 2023. In alignment with previous freezes on student loans, no interest will accumulate during this period. (All federal student loan payments made since March of 2020 have gone straight to capital.)

Part 2:

To smooth the transition back to repayment and help borrowers at the highest risk of delinquencies, the Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the DOE and up to $10,000 for non-Pell Grant recipients. Borrowers qualify if their individual income is less than $125,000 or $250,000 for households.

In addition, borrowers employed by nonprofits, federal, state, Tribal or local government or the military may be eligible to have all their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program.

Nearly 8 million borrowers may be eligible to receive relief automatically due to the Department of Education having relevant income data. If the DOE does not have your most recent income information, you’ll have to apply! An application will be available by early October, and you can sign up to be notified when the application is available here.

Be wary of scams: this program is being carried out through the DOE only. Any other company claiming to participate is likely phishing.

Part 3:

To make the student loan more manageable for current and future borrowers, the Biden-Harris administration proposed a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower and middle-income borrowers. Stay updated on the progress here.

Under this rule:

  • Borrowers would not have to pay more than 5% of their income monthly.
  • Borrowers earning under 225% of the federal poverty level are guaranteed not to have to make a monthly payment.
  • Loan balances older than ten years and under $12,000 would be forgiven.
  • The borrower’s unpaid monthly interest would be covered.

What’s Next:

For now, you’ve got through the end of this year until it’s time to start repaying your Federal Student Loans. Once the application for debt relief opens, you’ll have until December 31, 2023, to apply–but the sooner, the better; that way, you’re in good standing before the payment pause expires. The Department of Education will continue to process applications as they are received, even after the pause expires.


My loans have been accruing interest since the first pause.

MYTH – as of the first federal repayment pause in 2020, the Department of Education has suspended interest on loans.

I need to apply to extend my loan pause through the end of 2022.

MYTH – the extended pause will occur automatically.

If my eligible relief exceeds my outstanding debt, I get to keep the extra.

MYTH – your relief is capped at the amount of your outstanding debt; the “extra” amount is not yours to claim. (For example, if I owe $5,700, but I am eligible for $10,000 relief, the remaining $4,300 is not owed to me.)

Most borrowers continued to make payments to the Department of Education during COVID-19, while repayments have been frozen.

MYTH – 60% of borrowers have NOT made any loan payments during the COVID-related repayment pause.

We know, we know, it’s a lot to take in. But our staff at Financial Aid Services is here to help you and your institution in any way we can. Stay up to date through these resources, or let us help you.

1 Comment

  1. Debra

    September 29, 2022 at 9:41 am

    I have had two students ask me if we know if their defaulted loans will be written off with the $20,000 Debt Relief. They did receive Pell Grants while in school. One has her AS but what’s to change her career path. She would like to come to Cosmetology School.


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