Feeling out of control with how much you are required to pay every month towards your federal student loans? Then you may want to consider other options.

For anyone with federal student loans, you have a few different choices when it comes to your repayment.

Income-driven repayment plans were created to help borrowers potentially lower their required minimum monthly student loan payment, making their required payment more affordable. Student loans are complicated, so think of this post as a an intro to income-driven repayment options.

Note – we don’t go into detail in this post, but there is brand new student loan repayment plan that was proposed by the Biden administration in January 2023. You can read all the details of this plan, which we are calling New REPAYE, in this post.

Types of Income-Driven Repayment Plans

 
When you start paying back your federal student loans, you are automatically enrolled into the standard ten-year repayment plan. This repayment plan assumes that it will take ten years to pay off your student loans, and will require you to pay a set minimum monthly payment. This payment doesn’t change from month-to-month – it remains constant throughout the ten years of your loan.

While the standard ten-year repayment works well for some people, it may not be an ideal fit for everyone. If your monthly student loan payments eat up too much of your take-home pay, you may want to consider an income-driven repayment plan.

The term income-driven repayment is a broad term that encompasses four different types of repayment plans. Each plan is a little different, and will be outlined in this post. Generally, with income-driven repayment plans, instead of paying standard monthly payments to your loan balance, the amount you will be required to pay is directly tied to your income (more specifically, your adjusted gross income as reported on your taxes). The idea behind this is to ensure payments are actually affordable for student loan borrowers.

Below are the four income-driven repayment plans, starting with the most favorable to least favorable:

• Pay As You Earn (PAYE)

• Revised Pay As You Earn (REPAYE)

• Income-Based Repayment (IBR)

• Income-Contingent Repayment (ICR)

Eligible Loans for Income-Driven Repayment Plans

Not all federal loans are eligible for income-driven repayment. Here is a summary of eligible loans for each plan:

PAYE: All Direct loans except Parent PLUS loans and consolidation loans that repaid Parent PLUS loans

REPAYE: All Direct loans except Parent PLUS loans and consolidation loans that repaid Parent PLUS loans

IBR: All Direct loans and FFEL loans except Parent PLUS loans and consolidation loans that repaid Parent PLUS loans

ICR: All Direct loans except Parent PLUS loans; Consolidation loans made after July 1, 20016 that repaid Parent PLUS loans are eligible

Note that private student loans and federal student loans that were refinanced through a private lender do not qualify for an income-driven repayment plan. If you have private student loans read this post for tips on how to best go about repaying them.

Here’s an overview of each repayment plan.

1) Pay As You Earn (PAYE)

 
Pay As You Earn, or PAYE, is the most favorable IDR plan. Monthly payments are capped at 10 percent of your monthly discretionary income, and there is an opportunity for loan forgiveness after 20 years of qualified payments.

You must have been a new borrower as of October 1, 2007 or had no prior outstanding loan balances and took out a new direct loan on or after October 1, 2011. If you are ineligible for this repayment plan, you REPAYE is a good alternative.

2) Revised Pay As You Earn (REPAYE)

 
The Revised Pay As You Earn, or REPAYE, repayment plan is the newest option for anyone seeking an income-driven repayment plan. It works similarly to the PAYE plan, except it doesn’t have the “new borrower” requirements that PAYE has. It does come with a “marriage penalty,” though; your spouse’s income is taken into consideration in the calculation of discretionary income. On the PAYE plan a spouse’s income is only considered if you file taxes jointly; you can file married filing separately to exclude their income from the calculation.

Loan forgiveness is possible after 20 years of qualified payments for undergrad debt, or 25 years if you are repaying any graduate debt.

3) Income-Based Repayment (IBR)

 
The Income-Based Repayment, or IBR, plan sets your monthly payments at 10% if you are a new borrower or 15% if you are not a new borrower. To be an eligible “new” direct loan borrower for IBR you must satisfy a couple of requirements: you have not taken out a federal direct loan prior to July 1, 2014 and have no outstanding balance on a FFEL Program loan when you receive a direct loan on or after July 1, 2014. If you are a new borrower you are eligible for loan forgiveness after 20 years of qualified payments, or 25 years if you are not a new borrower.

The biggest benefit of IBR is that FFEL loans are eligible, which isn’t the case on any of the other income-driven repayment plans. Granted you can create a direct loan by consolidating FFEL Program loans.

4) Income-Contingent Repayment (ICR)

 
The Income-Contingent Repayment, or ICR, plan, is the least favorable income-driven repayment plan. It caps your payments at 20% of your discretionary income and offers loan forgiveness after 25 years of qualified payments.

The biggest benefit of ICR is that it’s the only IDR plan that Parent PLUS Loans and consolidation loans that repaid Parent PLUS Loans are eligible for.

Is an Income-Driven Repayment Plan for You?

 
There are several benefits to income-driven plans. One of the most obvious benefits is that they allows for more affordable monthly student loan payments.

If you have a smaller income, a large amount of student loan debt, or both, you may be finding it difficult to pay your monthly student loan bill. While Income-Driven Repayment plans often cost more money over the long-run, it’s a better option than simply ignoring your student loans because you can’t afford the payments. Not making your student loan payments will eventually lead to default, which ultimately increases the amount of money that you owe. An income-driven repayment plan can help avoid default.

Depending on which plan you enroll in, you may be eligible for student loan forgiveness after 20 to 25 years if you make consistent, on-time payments. Just keep in mind, any remaining student loan balance that is forgiven will be considered to be taxable income and could result in a large bill come tax-time (something we commonly refer to as the “tax bomb”). With that being said, getting loans forgiven can be a big win. Student loan interest also doesn’t compound as long as you don’t have a capitalization event (i.e. switching income-driven repayment plans), so the actual debt you get forgiven will build up slower than, say, credit card debt, which has interest that compounds over time.

Finally, if you are working towards Public Service Loan Forgiveness (PSLF), an income-driven repayment plan is what you want to be in.

Understand your Student Loans using a Student Loan Spreadsheet

 
We have a free student loan spreadsheet that helps you organize all the details of your student loans in one place. This snapshot of your loans can help you determine what repayment plans you are eligible and what plans make sense.

You can download the spreadsheet in the box below, or read about all the features here.

The increase in the amount of private student loans isn’t surprising, as there are a couple of major drivers in the trend.

First, the cost of college keeps increasing. This includes the cost of living, which many students take loans out for. As the cost of college increases, the amount of debt students need to take on increases as well. That drives many students to private student loans.

There has also been a big uptick in advertising related to private student loans. Both startups and banks have started to offer student loan refinancing as a product. This has naturally led many students to refinance federal student loans, which then turn into private student loans.

Refinancing federal student loans isn’t always a bad thing, but federal student loans have some major differences compared to private ones. We’ll kick off this private student loans guide by talking about how they differ from federal loans, then go into options for dealing with private student loans, and finally get into how you can potentially save thousands on your private student loans.

Let’s get to it!

Federal Student Loans vs. Private Student Loans

 
Federal student loans are owned by the federal government while private student loans are owned by a private company. Federal student loans come with a number of benefits including.

• Interest Benefit During Deferment – Subsidized federal student loans (not unsubsidized federal loans) do not accrue interest when they are in an eligible deferment period such as while you are in school at least half-time and during your grace period (the first six months after you leave school).
   
  Not having interest accrue can result in big savings, which is why direct subsidized federal student loans are the best option. Unsubsidized federal student loans do not come with this benefit, nor do private student loans.

• Income-Driven Loan Repayment Options – Borrowers have the option of moving federal loans onto an income-driven repayment plan, which essentially caps the required minimum monthly payment at 10%-20% of your discretionary income.

• Loan Forgiveness Opportunities – Federal student loans are eligible for Public Service Loan Forgiveness, or PSLF, which provides eligible borrowers tax-free loan forgiveness after 120 qualified monthly payments.
   
  Another loan forgiveness option is income-driven loan forgiveness. When you go on one of the four income-driven repayment plans and make payments for 20-25 years, the remaining loan balance and accrued interest will be forgiven. With this option you will owe taxes on the forgiven amount, but it’s still much better than not getting your loans forgiven.
   
  There are some other options for loan forgiveness with federal loans, but these are the two major ones. Private student loans do not have loan forgiveness opportunities.

Student loans are nearly impossible to discharge in bankruptcy, but federal student loans at least offer a path to forgiveness. They also offer the most flexibility in repayment.

These are just some of the reasons why I highly recommend prioritizing repaying private student loans over federal student loans.

But this brings up another important point: in general it makes sense to not refinance federal student loans. That’s not to say federal student loans should never be refinanced, but you will want to be very confident that it’s the right decision before refinancing. These post may be a bit repetitive, but I go deeper into federal student loan refinancing in this post.

Refinance with another company – There are a growing number of banks offering student loan refinancing. If your current lender isn’t willing to work out a reasonable repayment plan, there are plenty of other banks competing for your business. Credible is a company that gives you free rate quotes from multiple companies. If you use my link and end up refinancing your student loans, you will get a $300 cash bonus if you refinance less than $100k and a $750 cash bonus if you refinance more than $100k. (All bonus payments are by gift card. See terms.)

Even if you can afford your private student loan payment, it makes sense to look at what refinancing offers are available to you. You can refinance your private student loans over and over again, so I recommend looking at what rates are offered to you every 6-12 months. Put it on your calendar (seriously).

Let’s look at a quick example of what sort of savings you could be looking at.

Jeff has $60,000 of private student loans at 9.0% interest rate. On the standard ten-year repayment plan he would pay $31,207 in interest.

If he refinanced at 5.0%, he would pay just $16,367 in interest. That’s a savings of $14,840.

It’s also worth pointing out Jeff increased his monthly cash flow by $124 a month by refinancing.

Let’s say Jeff wants to get rid of these loans even faster. He started a side hustle and he’s diverting some of his earnings towards his student loan debt. If he refinanced at 5.0% and voluntarily made a $900 monthly payment instead of the required $636.

The result is paying only $7,067 in interest, a savings of $24,410 compared to the original loan of 9.0%. He also eliminates his loans after seven years and five months instead of ten years.

 
Clearly refinancing student loans can be a powerful tool. It makes so much sense to refinance private student loans. You may have less options, but it also makes it clear what you should do if you are looking to save money on interest.

Your credit score is going to be key when it comes to getting access to the best rates. I recently wrote a post about a fellow blogger who raised their credit score by more than 150 points in eight months. In the post I share what worked for him as well as tips for improving your credit score.

 
A couple of additional notes:

• You can potentially free up cash flow to knock out your private student loans faster by moving your federal student loans onto an income-driven repayment plan. Whatever cash flow savings you have from making the switch can be diverted towards paying down your private student loans faster. This does not have to be a permanent move, you can move your loans back onto the standard ten-year repayment plan once you’ve eliminated your private student loans if it makes sense for your financial situation.

• If you are drowning in debt and none of these strategies are working for you, consider reaching out to Leslie Tayne. She’s a debt lawyer who has experience helping people with an overwhelming amount of student loans. I interviewed her in this post about the topic of what to expect when working with a debt lawyer?

 
Ready to get some refinance quotes for your private student loans? You can use Credible – you will get a $300 cash bonus if you refinance less than $100k and a $750 cash bonus if you refinance more than $100k. (All bonus payments are by gift card. See terms).

There is no magical way to get rid of them quickly, especially if you have a lot of them.

The one thing you can do, though, is feel in control. To do that you need to get organized.

Which brings me to the student loan spreadsheet I’m sharing with you today..

I’ve been working on iterations of this spreadsheet for the past couple of years.

The very first draft I created was just for my personal use. We continue to use a spreadsheet to track our student loans. it was simplistic, but this new version is leagues ahead of it.

• Instructions on Where to Find your Student Loans – Whether you have federal, private, or state student loans, there are instructions on how to find the details of your student loans.

• Tracking Tab to House all your Student Loan Details – The most important part of the spreadsheet. This will be where all your student loan detail is laid out in a nice snapshot.

• Student Loan Repayment Calculators – Three different student loan calculators that help you visualize what sort of impact putting additional dollars towards your loans will have.

• Weighted Average Interest Rate Calculation – Simplifies various calculations by giving you one interest rate that can be used in all your student loan repayment calculations.

• Income-Driven Repayment Calculator – Shows your estimated monthly payment under the various income-driven repayment plans.

• Federal Poverty Guidelines – Helps with calculating income-driven repayment.

• Principal vs. Interest – Curious how much of each individual payment is going towards interest versus principal? This tool will help you visualize it.

You can get the free student loan spreadsheet by entering your email below, or feel free to scroll through to see screenshots and more detail of the various features.

This student loan spreadsheet has so many features that a table of contents felt necessary. This helps you easily jump to different sections of the spreadsheet.

There are instructions within the spreadsheet on how to find all your student loans, regardless of whether they are federal, private, or through a State.

This main tracking tab within the file is the most important and is the one that you will update over time with your student loan information. When you initially populate it you will identify whether your student loans are federal, private, or state, what the interest rate is on each loan, what the principal balance is, and more.

There are three student loan repayment calculators:

• Standard Ten-Year Repayment – Enter your loan balance and your interest rate and this calculator will tell you what your monthly payment is under the standard ten-year repayment plan.

• Goal Payoff Date – Do you have a goal date that you want to pay off your loans by? Curious how much you’d have to put towards your loans each month to make it happen? This calculator will tell you.

• Goal Monthly Payment – Curious how much faster your loans will be paid off if you put an extra hundred, two hundred, or more, towards your loans each month? This calculator is for you.

Weighted Average Interest Rate Calculation

Most people have a number of student loans, but for various estimates and calculations you want just one dollar amount (your total student loan debt) and one interest rate. This calculator will help you find what your weighted average interest rate is, which then can be used in calculators like the repayment ones I described above..

Income-Driven Repayment Calculator

Curious what your estimated payment would be if you switched from the standard ten-year repayment plan to an income-driven repayment plan? This calculator gives you an estimate of what your new monthly minimum payment will be under the various plans.

Income-driven repayment plans can sometimes feel a bit complicated, as they factor in the federal poverty level, family size, and adjusted gross income. This tab will simplify that for you, allowing you to select from drop-downs to automatically run calculations that are used in the income-driven repayment estimates described above.

Have you been making payments towards your student loans for a while now but the balance doesn’t seem to drop much? If you’re on the standard ten-year repayment plan it’s because a greater percentage of your payment goes towards interest early on in repayment. This tab shows the detail behind the 120 payments and you can clearly see how the split between principal and interest changes over time.

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Get the Ultimate Student Loan Spreadsheet

 
Ready to download the free student loan spreadsheet and access all the features? Simply enter your email below and we will send you a copy.

 
Remember, the first step to conquering your student loans is understanding them. The sooner you understand your loans and repayment options, the sooner you can put together a repayment strategy that fits with your life. No two situations are the same, and I encourage you to do what makes the most sense for your specific situation.

With companies like SoFi receiving hundreds of millions – or in the case of SoFi, $2 billion – in funding, investors and existing companies are seeing student loan refinancing as a big opportunity.

And why not? Student loan refinancing presents a potential win-win for lenders and borrowers. Borrowers have student loan debt at a certain interest rate. The lender is able to take that debt and offer it at a lower interest rate. The borrower saves hundreds or thousands on interest payments, and the lender is able to use the debt in new or existing products.

Get up to a $750* cash bonus when you refinance through a lender on Credible using our link.

Credible offers rate quotes from multiple lenders at once, including SoFi, Citizens Bank, College Ave, and more.

*$750 when you refinance > 100k, $300 below 100k; must not previously received quote from lender with your email to receive bonus

But there are drawbacks to student loan refinancing, at least for borrowers. Let’s go over a couple of them.

Refinancing federal student loans causes you to lose federal benefits

 
If you refinance federal student loans, you are creating a new, privately-held, loan. The federal loans you have cease to exist.

For some this isn’t a problem. They may have planned on paying off their debt faster than ten years and could afford their student loan payment. They may have an emergency fund and have their finances in a good spot. They may not need the benefits that come with federal student loans, whose benefits cease to exist with private student loans.

These benefits include:

• Access to opportunities for loan forgiveness

• Access to income-driven loan repayment plans

• Ability to take advantage of forbearance and deferment

Bottom line is this: before you refinance federal student loans you should both understand your federal student loan benefits and be okay with losing those benefits.

What if you already have private student loans? Or have already refinanced your loans?

If you have private student loans there is little to lose by refinancing. Of course you should do your due diligence and see if the company you are considering refinancing with have the same benefits as the current holder of your student loans. For example, does your current lender offer you the ability to stop making payments for a few months if you get laid off? What about the new company you are considering refinancing with?

At the end of the day it’s much easier to make the decision to refinance a private student loan than a federal student loan. Regardless, you should always make sure you are comfortable before making the final decision.

Student loan refinance and student loan consolidation are different

 
One common misconception borrowers have is that student loan refinance and student loan consolidation are the same. They are not.

Student loan consolidation differs from student loan refinance in a few key ways. First, student loan consolidation does not save you money on interest. It takes the weighted average interest rate of the loans you are consolidating, meaning, you aren’t going to save money on interest. Refinancing, on the other hand, should save you money on interest, otherwise there is little or no incentive to refinance.

An additional way they differ is that consolidating your federal loans means that your loans remain federal loans. It doesn’t create a private loan like refinancing does.

Read our full post on the difference between student loan refinance and student loan consolidation.

Student loan refinancing cannot be undone

 
It’s extremely important to recognize the fact that once you refinance your student loans you are unable to “undo” it. Once it’s done, it’s done. This is one area where student loan refinance and student loan consolidation are the same.

I will say this once again: make sure you are 100% comfortable with your decision to refinance your student loans before going through with it. For some it makes a lot of sense. Others will be better off retaining their federal student loans.

Where to Get Rate Quotes on Student Loan Refinancing

 
If you think refinancing may be a good option for you, gather rate quotes from at least two lenders.

Get up to a $750* cash bonus when you refinance through a lender on Credible using our link.

Credible offers rate quotes from multiple lenders at once, including SoFi, Citizens Bank, College Ave, and more.

*$750 when you refinance > 100k, $300 below 100k; must not previously received quote from lender with your email to receive bonus

 
Student loan refinancing isn’t going anywhere. If you aren’t sure whether it’s the right choice for you now, bookmark this post and come back when you are ready to get rate quotes.

Be sure to grab our student loan spreadsheet, which helps you create a “student loan snapshot” and contains a ton of other valuable information about student loans, including a calculator for income-driven repayment.

But we won’t.

This may sound odd. After all, who wouldn’t want to be done with student loan debt forever?

It’s a fair question, but pulling tens of thousands of dollars out of the stock market, raiding our savings, or even selling our home to pay off the debt would be a mistake.

In fact, it could be a six figure mistake.

To help you understand why we won’t pay off our student loan debt, let me first give you some background on our student loan situation.

Our Student Loans

 
We currently have six figures of student loan debt.

When my wife and I finished undergrad we had approximately $100k in student loan debt between the two of us. We both went to private schools in the Minneapolis-St. Paul metro area, and to be quite frank we were lucky we didn’t leave with more.

Both of us value our experiences at our respective colleges. We both are lucky enough to work full-time in what we went to school for. But $100k, or about $50k each, felt like a lot.

My wife and I met and dated throughout college. We both knew for years that she had to at minimum get a masters degree, if not a phd, to do the work she wanted to do in psychology.

My wife got her masters in counseling, which isn’t cheap considering the relatively low wages that therapists in the United States get paid. Lots of lip service about mental health from people, especially politicians, but as the saying goes “show me the money!” They haven’t yet. But I digress…

Over the years we have been making regular payments towards the student loans on my undergrad, but never more than the minimum required payment. I got a variety of rate quotes from Credible, but ultimately refinanced with SoFi. I waited a bit too long, though, and should have refinanced as soon as I was able to after undergrad.

We also made payments towards my wife’s student loan debt, but again only the minimum required payment under the standard ten-year repayment plan. Her loans went into deferment when she started grad school, and we also took out loans when she was in grad school.

Long story short, we started with $100k of undergrad debt and now have six figures of undergrad + graduate debt.

Why We Aren’t Getting Rid of our Student Loan Debt

 
While everyone wants to be debt free, I recommend people prioritize building an emergency fund and paying off credit card debt before they put anything extra towards their student loans.

We never had credit card debt, but instead of putting extra money towards student loans we built a healthy emergency fund. And we invested.

Which brings us to where we are today: we have enough assets to pay off our student loan debt. But we won’t.

Why not???

Because we are strategically repaying our student loans to maximize Public Service Loan Forgiveness.

You may have heard of Public Service Loan Forgiveness, or PSLF. If you aren’t familiar, though, it’s a program for tax-free federal loan forgiveness of Direct student loans after 120 qualified monthly payments.

A qualified monthly payment is…

• …made while working full-time for a 501(c)(3) nonprofit or the government (local, federal, state, etc.)

• …while on a qualified repayment plan (income-driven repayment plan or standard ten-year repayment plan)

• …on a qualified loan

This program is the most advantageous loan forgiveness because of the relatively short time-frame of ten years and the fact that forgiven debt is tax-free. What I mean by tax-free is that you don’t have to pay income taxes on the forgiven amount. In some other forms of loan forgiveness, notably income-driven loan forgiveness, you need to pay taxes on the forgiven amount. Not so with PSLF. With PSLF you could have $50k, $100k, or a million dollars forgiven. No tax implications.

My wife is a therapist who reasonably expects to be employed by a nonprofit or the government for at least the next ten years, if not her entire career. NOT looking into whether PSLF would benefit us would be a mistake.

My wife’s loans are currently on the REPAYE income-driven repayment plan. This plan takes into consideration my income regardless of how we file taxes.

Income-driven repayment plans take your Adjusted Gross Income (AGI) less the national poverty rate for your family size to calculate your discretionary income. If you plug your student loan information into our free student loan spreadsheet and use the income-driven repayment calculator (also within the spreadsheet) you will quickly see that many people could benefit from income-driven repayment. It’s even a more attractive proposition when you have an opportunity for PSLF.

There are opportunities to lower your AGI. For example, every dollar you put into a 401k or 403b will lower your AGI. Or an HSA. Or Standard IRA. Basically any dollar you put into a tax-deferred account will lower your AGI, which will in turn lower your required monthly student loan payment, which in turn will maximize the amount forgiven under PSLF.

I go into more detail on how to maximize PSLF in this post.

So why don’t we just off our loans? Because it would be a dumb financial decision. Instead we can shove money into tax-deferred accounts while letting our investments continue to compound interest year-after-year.

The worst case scenario would be our incomes increasing so much that our required monthly payments towards our debt would start to quickly knock out our student loan debt, even after maximizing every tax advantage.

If that happened, you won’t find me complaining!

But I thought Public Service Loan Forgiveness Didn’t Work?

 
A few months ago I saw one of the most well-known personal finance experts give absolutely terrible advice about Public Service Loan Forgiveness. He told someone they shouldn’t trust the program and that it doesn’t work.

This is misleading advice that could cost some individuals hundreds of thousands of dollars, if not their life. I don’t want to be dramatic, but we do have people today committing suicide over student loan debt. PSLF and, more broadly, strategically repaying student loan debt, can be a lifeline for student loan borrowers.

If you are in a position to benefit from student loan forgiveness, you absolutely should look into and take full advantage of the program. I explain in this post why fears about PSLF are completely overblown.

The reality is that there are popular personal finance “experts” that think you should suffer if you have student loan debt.

Think sharing a one-bedroom apartment with a roommate (or living in your parent’s basement to save money) while eating raamen for every meal and never doing anything fun (and god forbid you ever spent money on travel!).

This is a completely unrealistic approach at best and a bad financial move at worst.

Think of a social worker with $100k+ in debt who makes $40k a year. One option is making close to $1k a month in payments for a decade while working two or three jobs for years with a lifestyle that likely will negatively impact their health.

The alternative is paying $100-$200 a month on an income-driven repayment plan for ten years and receive Public Service Loan Forgiveness at the end of the decade. Option two also gives them the cash flow to only work one job while building up their savings and investments.

Please don’t listen to an expert – or anyone, for that matter – who wants you to suffer unnecessarily.

 
If you have student loans and you like what I’m saying, or you know someone who could benefit from strategically repaying their student loans, please check out my book Student Loan Solution: 5 Steps to Take Control of Your Student Loans and Financial Life.
 

No interest builds on the loans. The months will count towards student loan forgiveness.

So what should you do while your student loans are paused during COVID?

I’ve unfortunately seen many people share bad advice. Some of the advice is from borrowers who don’t understand all the complexities of student loans and aren’t deep into personal finance. Others have come from people in personal finance with huge followings, which is really unfortunate.

Before we go into what you should do, let’s level-set on what the CARES Act actually said.

Student Loan Relief the COVID Stimulus Bill (CARES Act) Provides (And Doesn’t Provide)

 
I gave a detailed analysis of all the impacts to student loan borrowers, but the key highlights for federal student loan borrowers include:

• All federal student loans will suspend payments for six months, ending September 30th, 2020

• This will happen automatically – borrowers do not have to do anything for payments to be suspended

• Interest will not accrue during the six-month period that payments are suspended

• The six months of suspended payments will count towards Public Service Loan Forgiveness (PSLF) and income-driven loan forgiveness

It’s also worth pointing out that any auto-debit payments processed after March 13th can be refunded to you. This will be relevant to many borrowers, as the law wasn’t even passed until after March 13th.

The bad news is that all of this is only relevant to federal student loans.

Any private student loans and FFEL loans not owned by the federal government received no relief in the stimulus bill.