Relief for Private Student Loans During COVID-19

During the pandemic, some states reached deals with various servicers to help borrowers affected by COVID-19 who weren't covered by the federal student loan payment suspension. However, most of these deals have expired.

If you live in a state that's not a party to such an agreement or the agreement has expired, most private student loan lenders offer payment help to borrowers who're facing a financial hardship because of COVID.

Federal Student Loan Payment Suspension Didn't Apply to Private Student Loans

The payment pause for federal student loans during the COVID-19 pandemic applied to Federal Direct Loans and Federal Family Education Loans (FFELs), but only FFELs that the U.S. Department of Education owns, not nondefaulted FFELs that other entities hold. (Borrowers with defaulted FFELs, including FFELs held by guaranty agencies, got a 0% interest rate and a pause on collection actions.)

Borrowers with Perkins Loans held by entities other than the Department of Education and nondefaulted HEAL loans also weren't covered. Private student loan borrowers didn't get relief either.

The federal student loan payment pause that started at the beginning of the COVID-19 pandemic has ended. Interest started accruing on September 1, 2023, and payments were due in October 2023.

Assistance for Private Student Loans and Nondefaulted Commercially-Held Federal Loans

Because the suspension under federal law didn't cover private student loans or nondefaulted commercially-held federal loans, some states filled this gap. California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, New York, Vermont, Virginia, and Washington, as well as the District of Columbia, all reached agreements with specific student loan servicers to offer forbearances of at least 90 days for private student loans and commercially-held federal loans. As part of the agreements, servicers also consented to waive late fees, temporarily stop negative credit reporting, and pause debt-collection lawsuits.

Other states temporarily suspended wage garnishment actions or suspended all collection actions on debts, including student loans.

But, again, most of these agreements have since ended.

What Should I Do If My State Is Not Offering Student Debt Relief?

If you live in a state or have a servicer not part of a student loan agreement (or the deal has expired), private student loan lenders typically offer assistance options, like short-term forbearances, fee waivers, lower interest rates, and interest-only payments. Contact your servicer to find out what alternatives the lender offers. Before agreeing to a particular relief option, verify the terms, such as whether you'll have to pay fees and how long the program lasts. Ensure you get this information in writing before enrolling in the program. Then, get confirmation that you're enrolled.

Also, be aware that if you have good credit, you might be able to refinance your loans with a new lender. If you can lower your current interest rate, you might be able to save a substantial amount of money. Your new lender might also offer more alternatives than your current lender if you eventually have trouble making the payments.

How to File a Complaint or Get Further Assistance

If you have a complaint about a student loan servicer, contact your state Attorney General's office and the Consumer Financial Protection Bureau. Also, your state could have a consumer protection office, department of banking, or student loan advocate (typically called an "ombudsman") who might be able to help you.