What to Do If Your Student Loans Aren’t Covered by Government Coronavirus Relief

 April 9, 2020
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Unfortunately, the federal government’s student loan interest waiver and repayment suspension announced in late March doesn’t help 100% of federal loan borrowers.

In fact, about 6 million Federal Family Education Loan (FFEL) borrowers and a sizable fraction of the 2 million people with Perkins loans won’t qualify because of their loan type. And of course, private student loan borrowers aren’t eligible either.

It’s entirely possible that you have some loans that qualify for the coronavirus economic stimulus package and some that don’t — which makes it even more important to confirm your eligibility and understand how to seek relief for your ineligible debt. Specifically, let’s examine two questions:

Are you sure your loans aren’t eligible for relief?

Thanks to the coronavirus economic rescue bill, your loan servicer will automatically reduce your interest rate to zero and cancel all payments due through Sept. 30 if you have an eligible federal student loan. [Updated Aug. 9, 2021: The interest-free pause on most federal student loan repayment has been extended one final time until Jan. 31, 2022]

Eligible loans include all federally-held Direct loans, including Grad and Parent PLUS loans, as well as most FFELs (which haven’t been granted since 2010). That leaves the following loan types uncovered:

  • FFELs guaranteed by the federal government but held by a private entity
  • Perkins loans originated by your school
  • Private loans granted by banks, credit unions, state-run education authorities and online companies

Undoubtedly, the differences between a federal loan being “held” or merely “guaranteed” is bound to confuse. If you’re not sure what kind of loans you have, start by logging into the Federal Student Aid (FSA) website with your FSA ID to view all your federal loans.

A FFEL loan borrowed before 2010 is unlikely to meet criteria for relief. For any Perkins loans, you could clear up the confusion by calling your loan servicer directly or contacting your school’s financial aid office.

Finally, if you have education debt that doesn’t appear on the FSA website (and therefore isn’t owned or guaranteed by the Department of Education), call your lenders for those missing loans to confirm that your debt to them is categorized as private loans. You can also review your credit report to find the names of these lenders or loan servicers — the information is available for free via AnnualCreditReport.com.

How to handle repayment on loans ineligible for relief

If you have commercial or school-granted loans, you might think you’re out of luck. But there are a variety of ways to still pause or reduce your repayment, receive repayment assistance and generally manage your debt until the economy recovers:

Contact your lender or loan servicer immediately

It’s imperative to speak directly with your lender or loan servicer — not a third party, as that could leave you vulnerable to coronavirus student loan scams.

Of course, your repayment options will depend on your loan type.

For federal student loans ineligible for relief…

You could pause your monthly payments with a deferment or forbearance (unrelated to COVID-19):

  • A general forbearance that’s awarded at your servicer’s discretion, based on your financial constraints
  • An unemployment deferment if you’ve lost your job

Alternatively, you could lower the monthly payments on your ineligible FFEL debt by enrolling in the Income-Sensitive Repayment plan to cap your dues at a percentage of your annual income. If you recently suffered a loss of income, you could apply for a recalculated (decreased) payment obligation.

Be aware, however, that interest will continue to accrue and capitalize during a forbearance, unless you have subsidized loans. And interest will also build up if you join an Income-Sensitive Repayment plan that lengthens your loan term.

For private student loans…

There are fewer (and usually less generous) options for private loans, but they do exist. These include:

  • Economic hardship or disaster-related forbearance: A pause in repayment that’s awarded on a case-by-case basis and doled out in one- to three-month spans.
  • Temporary payment reduction: Less common than forbearance, these payment reductions (like those offered by Discover) would lower your monthly dues for a brief period.
  • Temporary interest rate reduction: Navient, which services government-held federal loans eligible for the 0% interest rate but also provides ineligible federal and private loans, encourages borrowers affected by COVID-19 to apply for a lower rate.

That said, the options available have expanded as lenders seek to work with their customers during the coronavirus pandemic. You can check out what some of the biggest student loan companies are offering by consulting our list of forbearance options from private student loan companies during the COVID-19 outbreak.

Before agreeing to any changes to your loan agreement, ensure you understand the implications. Interrogate your lender or loan servicer with questions to make sure you understand how interest will pile up during a forbearance, for example. You might also ask about the length of time that a payment reduction could add to your overall repayment term. Then return to Student Loan Hero and use our loan repayment calculators to assess the consequences.

Consider a Direct Consolidation loan for your ineligible federal loans

You might have already discovered one workaround for your ineligible FFEL or Perkins loans: grouping them into a Direct Consolidation loan. Besides getting you covered for a portion of the 0% interest and payment-suspension period, consolidation would also deliver a single monthly payment and make you eligible for income-driven repayment (IDR) plans.

Consolidating with Uncle Sam might not be wise in certain cases, though. Here are three potential cons to be aware of:

  1. It would erase your progress toward the consecutive-payment criteria for a program like Public Service Loan Forgiveness.
  2. Outstanding interest on your loans will be capitalized (added to your principal loan balance) when you consolidate.
  3. You’ll likely miss at least the first two months of the government’s six-month payment suspension. While applying for a Direct Consolidation loan takes less than a half-hour, actually receiving it would take a minimum of 30 days, and likely longer.

If you’re on the fence about consolidation, speak with your loan servicer. You can also review our guide about deciding whether consolidation is right for you.

Look into refinancing at least your ineligible private loans

Like consolidation, refinancing would group your student debt into one new loan. But while it still won’t grant you access to the government’s interest-rate freeze and payment suspension, refinancing could reward you with a lower interest rate or a monthly payment (or both) more suited to your ability to repay.

These potential benefits generally make refinancing a great option for your private student loans — all the more so as refinancing companies are now offering relatively low rates after the COVID-19 outbreak prompted emergency rate cuts from the Federal Reserve. If you have strong credit (or have a cosigner who does), you could refinance your existing private debt with a new lender, perhaps one that also offers some coronavirus pandemic refinancing relief.

However, know that there are pros and cons to refinancing, so don’t rush into refinancing (and privatizing) FFEL and Perkins loans that aren’t currently eligible for the federal relief package. The biggest consideration is that once your refinance, any federal loans will lose their government protections, such as IDR and expanded deferment and forbearance options. You also wouldn’t be eligible for any future government relief, unless it applies to private education debt.

Talk to your employer about pitching in toward payments

If you have federal or private loans that don’t qualify for the student loan interest waiver and payment suspension, now’s the time to bring up your student debt concerns with your human resources department.

As part of the coronavirus economic rescue package, the government gave employers temporary tax relief for contributing up to $5,250 toward their employees’ student loan payments. This benefit is slated to stay until at least Jan. 1, 2021, and it could cover any student debt, whether federal or private.

It’s worth noting that many major companies provide student debt relief already.

Stay tuned to Student Loan Hero

Sure, your commercially-held federal loans and private loans are mostly unaccounted for in the government’s new relief package, but they could be affected by future legislation.

As recently as March 19, for example, Congressional Democrats were pushing for $10,000 or more in forgiveness for federal loan borrowers. It’s not clear whether such a plan will come to pass, but the magnitude of it makes it worth keeping an eye on.

We’ll keep you posted on developments via our Student Loan Hero news reports and our Coronavirus Information Center. The FSA website’s updates sometimes lag behind other news sources, but it’s worth bookmarking as well.

Interested in refinancing student loans?

Here are the top 9 lenders of 2022!
LenderVariable APREligible Degrees 
2.49% – 11.72%1Undergrad
& Graduate

Visit Splash

2.50% – 6.30%2Undergrad
& Graduate

Visit Laurel Road

4.13% – 7.39%3Undergrad
& Graduate

Visit Lendkey

2.49% – 7.99%4Undergrad
& Graduate

Visit Earnest

2.49% – 7.99%5Undergrad
& Graduate

Visit NaviRefi

3.24% – 8.24%6Undergrad
& Graduate

Visit SoFi

2.48% – 7.98%Undergrad
& Graduate

Visit Elfi

1.74% – 7.99%7Undergrad
& Graduate

Visit Purefy

3.69% – 9.92%8Undergrad
& Graduate

Visit Citizens

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 6, 2022.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $9 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.


This information is current as of April 29, 2021. Information and rates are subject to change without notice.

3 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 09/09/2022 student loan refinancing rates range from 4.13% APR – 7.39% Variable APR with AutoPay and 2.99% APR – 9.93% Fixed APR with AutoPay.

4 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

5 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

6 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

7 Important Disclosures for Purefy.

Purefy Disclosures

Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.  

8 Important Disclosures for Citizens.

CitizensBank Disclosures

Education Refinance Loan Rate Disclosure: Variable interest rates range from 3.69%-9.92% (3.69%-9.92% APR). Fixed interest rates range from  4.49%-10.11% (4.49%-10.11% APR). 

Undergraduate Rate Disclosure: Variable interest rates range from 6.39%- 9.60% (6.39% – 9.60% APR). Fixed interest rates range from 6.58% – 9.79% (6.58% – 9.79% APR).

Graduate Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).

Education Refinance Loan for Parents Rate Disclosure: Variable interest rates range from 3.69%- 9.09% (3.69%- 9.09% APR). Fixed interest rates range from 4.49% – 9.28% (4.49% – 9.28% APR).

Medical Residency Refinance Loan Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).

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