What the CARES Act means for students

Legislation that became U.S. law in March in response to the coronavirus pandemic includes helpful changes to student loans and financial aid.

Our College & COVID-19 series is part of our commitment to students and families during this time of uncertainty. Our goal with this series is to provide the resources, information, and guidance you need to help you successfully continue your college journey.


The coronavirus pandemic has brought about major financial challenges for American families. In response, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. You might be wondering if your student loan is covered by the CARES Act, or how the act will help you on your journey to college. For starters, the legislation, which became U.S. law in March, is designed to support not only businesses and homeowners but also college students and graduates paying back federal student loans. Here are some of the ways the CARES Act could affect your finances, plus other resources to help you stay on track during uncertain times.

The CARES Act and federal student loans

Which federal student loans are impacted by the CARES Act? The CARES Act suspends principal and interest payments on all federal student loans through Sept. 30, 2020. Since U.S. Department of Education data shows an estimated 92% of all student loans are federal, this likely affects you if you borrowed money to pay for your college education.

This suspension is automatic — you do not have to apply to qualify for it or take any action. The suspended payments will count toward student loan forgiveness programs, including Public Service Loan Forgiveness, as long as you meet certain requirements, according to the U.S. .

Additionally, there are certain federal loans that will have 0% interest rates through Sept. 30, 2020. This means that if you do choose to pay your loan, you will not have to pay with any interest. Here’s a list of federal student loans that qualify for the 0% interest rate if they are owned by the U.S. Department of Education):

  • Defaulted and nondefaulted Direct Loans
  • Defaulted and nondefaulted FFEL Program loans
  • Defaulted and nondefaulted Federal Perkins Loans
  • Defaulted HEAL loans

Pell Grants

If you have dropped out of school during the spring 2020 semester because of the coronavirus outbreak, you do not have to return your federal aid from Pell Grants. Dropping out will not affect whether you’re eligible for grants or federal loans in the future.

Federal Work-Study Program

Federal Work-Study Program wages will be paid until the end of the spring semester as if that work had been completed. That means even if you had to leave campus and your work-study job, you’ll still get a paycheck up to the full amount of work-study you qualified for in your financial aid package. If you have questions about your work-study payments or concerns about the program beyond the spring semester, contact your work-study manager or your school’s financial aid office.

Federal student loans held by other lenders

Some federal student loans under the Federal Family Education Loan (FFEL) Program are not owned by the U.S. Department of Education, but by commercial lenders or your school. These loans are not eligible for the 0% interest rate benefit at this time. However, the lenders are approved to suspend payments until September — they just aren’t required by law to do so. In this case, you should try contacting your loan servicer or the financial aid office at your school to find out what options are available.

Private student loans

The pause on repayment of federal student loans under the CARES Act does not automatically apply to private student loans, such as those from a bank or directly from your school. Contact your lender or the financial aid office at your university to find out what options are available if you are concerned you may have trouble making payments.

There are options to help you get through this crisis so you can stay on track with your college goals.

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