Finding relief for student loan debt becomes even more pressing if you’re one of the millions who have lost their job—or are earning less—because of the pandemic. Here’s some good news: It’s easier than ever to get payment relief for student debt right now, no matter what type of loan you have. We’ll explain the different programs available, who qualifies, how you can benefit from them, and what to look out for.

Automatic Federal Student Loan Forbearance

The Coronavirus Aid, Relief and Economic Security (CARES) Act grants federal student loan borrowers automatic administrative forbearance if the U.S. Department of Education owns the loans. What does this mean?

Originally passed on March 13, 2020, and extended through Sept. 30, 2021, the CARES Act in effect now means:

• Your interest rate will drop to 0%.
• You don’t have to make payments.
• If you want to keep making full or partial payments during this time, you can.
• You won’t be charged any late fees.
• Interest will stop accruing.
• The interest you owed on March 12, 2020, will not be added to your principal balance.
• You don’t have to contact your loan servicer to request these benefits if you’re eligible for them.

When you log in to your student loan account or look at your student loan statement, it should show an interest rate of 0% if you’re receiving the benefit.

If your rate is not 0%, double-check that your servicer hasn’t made a mistake. Here’s how to determine if you should be getting this rate.

Education Department–Owned Loans

If you have one of the following loans, there’s a good chance it’s owned by the U.S. Department of Education and that you qualify for 0% interest:

• Defaulted and nondefaulted Direct Loans (including parent and graduate student PLUS loans)
• Defaulted and nondefaulted Federal Family Education Loan Program (FFELP or FFEL Program) loans
• Defaulted and nondefaulted Federal Perkins Loans
• Defaulted Health Education Assistance Loans (HEAL)

The first category, Direct Loans, is a slam dunk. The Department of Education is always the lender. Even so, your servicer may be one of the 11 companies that collect student loan payments and handle administrative matters for the government.

If You Don’t Know Who Owns the Loan

The next three loan categories are not necessarily ED-owned. Commercial lenders sometimes own FFEL and HEAL loans, and schools sometimes own Perkins loans. (HEAL loans were discontinued in 1998, so if your loans are newer than that, you may not have heard of HEAL.)

If you don’t see that 0% interest rate on your account, contact your student loan servicer (that’s the company you make your payments to) and ask who owns your loans. If you don’t want to call or email them, you might be able to find the information yourself by logging into your account and looking for your loan details.

Let’s say your servicer is Navient, one of the biggest student loan servicers. Within your Navient account, you can click on “loan details” to see a list of all your loans. This list won’t show you who owns your loans, though. To get that information, you’ll need to pick one of your loans from the drop-down box.

Best-case scenario, your servicer discovers it has made a mistake and cuts your rate to 0% retroactive to March 13, 2020. We haven’t read reports that this is happening, but when it comes to student loans, you have to be your own advocate. Student loan servicers have a poor reputation for acting in borrowers’ best interests. To be fair, why should they? You aren’t really their customer; the government or the investors who own your loans are their customers. They’re basically debt collectors for whoever owns your loans; that’s how they earn money.

So if your servicer says you’re not eligible, don’t take their word for it. Do your own research to make sure. Besides logging in to your account at your servicer’s website and poking around, you can also get information about your loans from StudentAid.gov. If you don’t have an account yet, spend a few minutes to create one. Once you’ve logged in, you can view the details of your loans. You might find details here that you couldn’t find on your servicer’s site.

The Confusing Case of FFELP Loans

Almost 6 million federal student loan borrowers can’t get any relief from the CARES Act because a commercial lender holds their loans, according to calculations by Travis Hornsby, the founder of Student Loan Planner, a company that helps borrowers tackle student loan debt.

Maybe you had Stafford loans, a type of FFELP loan that hasn’t been issued since they were replaced by Direct loans in 2010. FFELP loans were federal loans, but they were issued by private lenders. Who owns them now? Sometimes, it’s the Department of Education—and that means you get the CARES Act relief. Other times, it’s a commercial lender, and you won’t qualify for CARES Act relief.

Let’s say you’ve found the part of your servicer’s website that says who owns your loans, and you see something like this:

Current Owner: NAVIENT FEDERAL LOAN TRUST

Guarantor: PA HIGHER EDUCATION ASSISTANCE AGENCY

Does “Federal Loan Trust” in the name mean the federal government—that is, the Department of Education—owns your loan and you should be getting automatic administrative forbearance?

Unfortunately, the answer is no. “If a Stafford FFELP loan is owned by Navient Federal Loan Trust, it is not owned by the U.S. Department of Education and therefore is not eligible for the payment pause and interest waiver,” said Mark Kantrowitz, publisher and VP of research for Savingforcollege.com and one of the country’s leading experts on student loans.

Why You Might Not Get Interest-Rate Relief

Loans like the one just described are known as securitized loans, which means “the lender transfers title to the loans to a trust and sells shares in the trust to investors,” Kantrowitz says. “The interest revenue is used to make payments to the investors. Since the loans are held by the trust, the terms of the loans cannot be modified unless the modification is specifically allowed by the terms of the trust. So, it is still a federal loan, with all the benefits and terms intact, but it is not owned by the U.S. Department of Education.”

This is the more complicated explanation as to why your interest rate isn’t 0%. But there’s another twist: A guarantor is a company that reimburses the federal government for defaulted student loans. In this case, the guarantor is the Pennsylvania Higher Education Assistance Agency. PHEAA guaranteed more than $24 billion in loans as of June 30, 2019, according to one of its recent financial statements.

The guarantor acts as an intermediary between the U.S. Department of Education and the lender, Kantrowitz said. If you default, your lender files a claim with the guarantor. The guarantor pays the default claim, transfers the loan to the Department of Education, and the guarantor becomes the servicer.

“If a loan has a guarantor, it usually is a FFELP loan that is not held by the U.S. Department of Education, unless the loan is in default,” Kantrowitz said. “So, FFELP loans that are in default are one category of ED-held loans eligible for the payment pause and interest waiver.” 

Defaulting causes a bunch of administrative headaches and financial consequences, both long and short term, that you don’t want to inflict on yourself. So instead of doing that, learn about your other options.

What to Do if the Education Department Doesn’t Own Your Loans

Having private loans—or federal loans that aren’t owned by the Education Department—doesn’t mean you can’t get relief if you’ve been affected by the pandemic.

Under a state-led initiative, residents of California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, Virginia, and Washington are eligible for relief on student loans not held by the Department of Education. In these 10 states, you can get payment relief if your loan servicer is one of these companies:

Other companies may be participating as well.

This state-led payment relief is less generous than what’s available through the CARES Act, but it’s better than nothing. You can:

• Request temporary forbearance for 90 days
• Get relief from late fees
• Get relief from negative credit reporting and debt collection activities, including wage garnishment

Although interest may still accrue, it will not be capitalized (added to your loan balance).

Check Your State’s Website for Relief Options

Visit your state’s website to see what relief lenders are providing where you live. Whether your state has come to an arrangement with commercial student lenders or not, you can still visit your loan servicer’s website to see what options they’re offering all borrowers, and you can also call or email your servicer to find out what specific options may be available to you given your circumstances.

You’ll have to request assistance if you want it; only borrowers with Department of Education loans get automatic assistance. And in some cases you might have to demonstrate that you’ve experienced economic hardship. You should also know that there may be long-term consequences, such as paying more interest in the long run and pushing back the date when you’ll be student-debt free.

Besides the possibilities described above, you may also be able to request economic hardship or unemployment deferment. You may be able to switch to an income-based repayment plan. You may also be able to get a temporary reduction in your interest rate or a loan modification.

Another option, if you have federal loans that aren’t owned by the Department of Education, is loan consolidation. It usually takes 30 to 45 days, and you can “consolidate” even if you only have one loan. It will get you the 0% CARES Act rate, but it will also cause you to lose any benefits provided by the lender, such as a lower interest rate. That means your post-consolidation rate, after the 0% period ends, could be higher, Kantrowitz says.

The Bottom Line

Future stimulus bills aimed at helping Americans hurt by the coronavirus might provide greater student loan relief. The proposed HEROES Act introduced by House Democrats, for example, would make all federal student loans eligible for the relief provided under the CARES Act, even if the Department of Education doesn’t own them. But this is just proposed legislation, and we don’t know if it will pass, how long that process will take if it does, or what the final act will look like. For now, the options available are the ones described above. Those are what you can act on if you need a break on your student loans.