As we continue to navigate changes to the federal education loan program that have occurred due to the COVID-19 pandemic, we want to provide you with the latest information. We will continue to monitor for new developments and make updates to this page when needed.
Student Debt Relief Plan and Federal Student Loan Repayment Pause
The Biden-Harris Administration and the U.S. Department of Education recently announced a new three-part student debt relief plan which includes loan forgiveness of up to $20,000 and an extension of the repayment pause. To learn more about the one-time federal student loan debt relief, visit: Student Debt Relief Plan.
As of November 23, 2022, the student loan repayment pause was extended until the U.S. Department of Education is permitted to implement the debt relief program or the litigation is resolved. Payments will restart 60 days later. If the debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that. We will notify borrowers before payments restart. For the most up to date information regarding the repayment pause, visit studentaid.gov/announcements.
Income-Driven Repayment Account Adjustment for Eligible Borrowers
The Department of Education will conduct a one-time adjustment of IDR-qualifying payments for all William D. Ford Federal Direct Loan (Direct Loan) Program and federally owned Federal Family Education Loan (FFEL) Program loans. This one-time account adjustment will apply to borrowers who are:
- on an income-driven repayment (IDR) plan or were on one in the past;
- in the Public Service Loan Forgiveness (PSLF) program; or
- not on an IDR plan but are interested and have Direct or Federal Family Education Loan (FFEL) Program loans held by the U.S. Department of Education (ED).
The adjustment will be applied to most borrowers’ accounts in 2024. It will be applied only to Direct and FFEL Program loans held by ED. If you have commercially held FFEL or any Perkins or HEAL loans, you will need to consolidate before the end of 2023 to benefit from the account adjustment.
If you have commercially held FFEL or any Perkins or HEAL loans, you will need to consolidate before the end of 2023 to benefit from the account adjustment.
For more information, including an FAQ, please visit the Department of Education’s Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness Programs webpage.
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness Program (PSLF) is a program that forgives the remaining balance on Federal Direct Loans after a borrower has made 120 qualifying monthly payments while working full-time for a qualifying public service employer.
To qualify for PSLF, you must:
- Be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
- Work full-time for that agency or organization;
- Have Federal Direct Loans (or consolidate other federal student loans into a Federal Direct Consolidation Loan);
- Repay your loans under an income-driven repayment plan; and
- Make 120 qualifying payments.
- Public Service Loan Forgiveness (PSLF) Help Tool
- Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application
- Limited PSLF Waiver Information
- Public Service Loan Forgiveness Program FAQ
Free Information Session from FAME:
- Recorded IDR and PSLF webinar: “Understanding the Status of Debt Relief, PSLF & IDR Waivers and New Information for Parent PLUS Loan Borrowers” from January 25, 2023
Status of Federal Loan Repayment and How to Prepare
NOTICE: Federal Student Loan repayment pause has been extended. Here are tips on how to prepare.
- Update your contact information with your federal loan servicer, if you are unsure who your loan servicer visit studentaid.gov.
- Know what you owe. If you have not received a letter or email from your servicer, contact them to confirm your student loan payment. Your loan servicer is your best source for official, up-to-date information about your loan.
- Set aside your monthly payment ASAP to establish a repayment habit before it happens
- Work toward getting your financial house in order before you have to repay: pay off debt, scale back on spending, use FAME’s free online financial wellness tool at FAME.enrich.org
- If you are struggling to repay your loan, REACH OUT TO YOUR SERVICER. They can offer numerous options to help you avoid delinquency and default.
For more information, visit Coronavirus and Forbearance Info for Students, Borrowers, and Parents at StudentAid.gov.
What is the current status of federal student loans?
Updated April 5, 2022. Federally held student loans will resume repayment after August 31st. Once the payment suspension ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due.
Updated December 22, 2021. Federally held student loans will resume repayment after May 1st. Once the payment suspension ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due.
Updated November 29, 2021. Federally held student loans will resume repayment After January 31st. Once the payment suspension ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due.
Updated August 6, 2022. The below reflects a FINAL extension of federal student loan repayment accommodations due to COVID-19. The flexibility was scheduled to expire on September 30, 2021, but President Biden has directed the Department of Education to extend the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activity through January 31, 2022. This is being described as a FINAL extension and borrowers should begin planning now to reenter repayment as early as February 2022.
Updated November 23, 2022. The student loan repayment pause is extended until the U.S. Department of Education is permitted to implement the debt relief program or the litigation is resolved. Payments will restart 60 days later. If the debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that. We will notify borrowers before payments restart.
Student loan interest is frozen on all federally held student loans (for both currently enrolled students and borrowers in repayment).
Payments are suspended on all federally held loans. Borrowers in income-based repayment plans or Public Service Loan Forgiveness will still have these months count toward their total qualifying payments even if they are not making payments. Please keep in mind that this suspension is not payment cancellation or forgiveness but is a forbearance.
What is a federally held student loan? All Direct Loans are federally held, as are some Federal Family Education Loans (FFEL) and some Federal Perkins Loans. However, some older FFEL are privately held and some Federal Perkins Loans are held by individual schools, not the federal government. To determine if your FFEL and Perkins Loans are federally held, log in to StudentAid.gov with your FSA ID and check who is listed as the lender on the loan. If you have never created your FSA ID username and password, start by clicking on “Create Account.” Borrowers with non-federally held loans who are having trouble making payments should contact their loan servicer.
What if I have defaulted on my student loans? If you have federally held defaulted student loans, effective March 13, 2020 through January 31, 2022, your interest rate is reduced to 0% and your loan payments are suspended. Additionally, involuntary collections such as wage garnishment, tax refund reductions, and reductions of federal benefits like social security benefits are also suspended until January 31, 2022.
On March 30, 2021, the COVID-19 emergency relief measures were expanded to include defaulted student loans made through the Federal Family Education Loan Program (FFEL). If you are a FFEL borrower in default, you may be able to receive a refund for any wages garnished or tax refunds seized since March 13, 2020. Additionally, if you made voluntary payments on your defaulted FFEL Program loans since March 13, 2020, you may be able to request a refund for those payments. If you defaulted on your FFEL Program loan after March 13, 2020, your payments made since that time will be refunded and your interest rate will be set to 0%, your loan will be held by the Department of Education, the loan status will be returned to “good standing,” and the guaranty agency for your loan will request that the record of your default be removed from your credit report.
For more information, visit Coronavirus and Forbearance Info for Students, Borrowers, and Parents at StudentAid.gov.
What can I do if I’m having trouble making payments on my private student loans?
Borrowers who are having trouble making payments as a result of COVID-19 should contact their private loan servicer. Maine Loan borrowers having difficulty making payments should contact FirstMark Services or FAME’s Education Team to discuss payment options. Borrowers through other lenders in the Maine Private Education Loan Network should contact American Education Services at 1-800-233-0557 to discuss payment options.
Who do I call about payments on my FAME-administered loans? If borrowers who have loans through any of the following programs are having difficulty making payments as a result of COVID-19, they should contact FAME’s Education Team at 1-800-228-3734, Option 1: Maine Medical Association Loan, Educators for Maine, Maine Dental Education Loan, Maine Veterinary Medicine Loan, or the Health Professions Loan Program. We are able to offer COVID-19-related accommodations on these programs through September 30, 2021.
Has eligibility for Supplemental Nutrition Assistance Program (SNAP) been expanded?
Yes! It’s now easier for college students to get food assistance during the pandemic. As part of the second coronavirus stimulus package passed in December, eligibility has been temporarily expanded to include college students enrolled at least half time who:
- have a zero Expected Family Contribution (EFC) from the FAFSA; or
- who are eligible for work-study.
To receive SNAP benefits, students must apply and meet income and other eligibility criteria.
To apply for SNAP, go to: https://www.maine.gov/dhhs/ofi/programs-services/food-supplement and apply online using My Maine Connection – click on “Sign Up Now!”
Applicants will need to provide documentation confirming they meet this expanded eligibility, which can be provided in the following ways:
- A screenshot or documentation from your school indicating that you have a zero EFC or are eligible for work-study; or
- A screenshot or copy of your financial aid offer showing a zero EFC, full Pell Grant eligibility (i.e., $6,345 if full time), or work-study eligibility; or
- A screenshot or copy of your Student Aid Report (just page 1) which can be found at FAFSA.gov. Log in with your FSA ID and then click on “View Student Aid Report.”
For more information, contact DHHS’s Office of Family Independence by email at Farmington.DHHS@Maine.gov or by phone at 1-855-797-4357.
I’m a college student struggling with a financial emergency. Can my school help me?
Students experiencing a financial emergency should contact their higher education institution to see if help is available. Pending implementation, institutions will be able to use Supplementary Education Opportunity Grant (SEOG) funds as emergency aid. Institutions will also receive funding from the Federal Education Stabilization Fund and are required to use some of that funding toward emergency aid.
Are there new rules about the taxability of my federal student loans if they are forgiven/cancelled?
Federal student loans forgiven as part of the Public Service Loan Forgiveness program are currently not considered income for federal income tax purposes. With the passage of the American Rescue Plan on March 11, 2021, federal student loan cancellations made under other qualifying income-driven repayment plans are non-taxable at the federal level if the cancellation occurs after December 31, 2020 and on or before December 31, 2025. As always, you should check with your tax consultant regarding taxability of any student loan forgiveness or cancellation, whether at the federal or state level, when you file your state taxes.