Are All Student Loans on Hold? No, Here’s Why Not

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Stanley Tate

#1 Student Loan Lawyer

Updated on December 19, 2022

Only federal student loans owned by the U.S. Department of Education or are in default are on hold. Borrowers with private student loans and commercially held FFEL and Perkins Loans must continue to make their monthly payments, and interest will continue to accrue.

The federal government suspended student loan payments and set the interest rate to zero for millions of Americans at the onset of the coronavirus pandemic. It also lets borrowers get credit towards Public Service Loan Forgiveness and Income-Driven Repayment Plan forgiveness for every month they spent in the student loan payment pause forbearance.

Those benefits aren’t available to every federal student loan borrower. Only those with Ed-owned student loans qualify for that relief. Other borrowers with commercially held Federal Family Education Loans and Perkins Loans weren’t entitled to the same debt relief — at least not automatically. Those borrowers could qualify for the payment freeze if they consolidated their ineligible loans into a Direct Consolidation Loan.

If your student loan servicer is still sending you billing statements, your loan is not Ed-owned, but don’t panic — you still have time to consolidate your FFEL and other loans. Visit the Federal Student Aid website,, to start the consolidation process.

Related: When Will Student Loan Payments Resume?

Why are my student loans not paused?

Monthly payments for your student loans aren’t paused because your loans are owned by a private lender, guaranty agency, or your school — not the Education Department. For that same reason, your loans aren’t eligible for President Joe Biden’s debt cancellation plan that — if permitted to pass — will wipe away up to $20 thousand in federal student loan debt for borrowers who earned $125 thousand or less during 2020 or 2021.

While there’s no way you can qualify for that one-time forgiveness, there is something you can do to freeze your monthly payments on your federal loans: consolidate.

If you consolidate your FFEL and Perkins Loans into a Direct Loan, your new loan will be eligible for the payment pause, which, following a recent announcement from the White House, may not end until the fall of 2023.

Related: When Is the Student Loan Forbearance Ending?

Why you should consolidate to take advantage of the student loan pause

Nearly everyone who has had to pay on their loans throughout the pandemic should consolidate to take advantage of the student loan pause. Not only does it put your payments on hold and stop interest from being added to your loan balance, but it also may push you closer to loan forgiveness.

One of the big changes the Biden administration made to the federal student loan system was to fix the broken PSLF and IDR plan student loan forgiveness programs. Both had been broken for years due to mismanagement by student loan servicers and poor oversight from the U.S. Department of Education.

New leadership is working to right those wrongs by reviewing borrowers’ accounts and giving them credit toward both programs for payments they’ve made under any student loan repayment plan as well as time spent in long forbearances and some deferments.

Related: Student Loan Forgiveness for Married Couples

If you consolidate your federal loans, you can also participate in these debt forgiveness initiatives.

Worried about losing the progress you’ve made toward forgiveness? Consolidating won’t undo your progress toward PSLF or forgiveness through the IDR plans. If you consolidate before May 1, 2023, the department will count your payments made before you consolidated as a qualifying payment for both forgiveness programs.*

Related: Does the Student Loan Pause Count Toward Forgiveness?

* To get credit for PSLF, you must be currently employed full-time with a government or nonprofit employer.

Bottom Line

Federal student loan payments are suspended for most borrowers until 2023. If your student loans haven’t been on hold during the pandemic, you still have time to take advantage of the pause.

If you’d like help navigating the best choice for you, schedule a time to talk with me. We’ll review your loans and devise a strategy that puts you in the right repayment plan for your budget while maximizing the student debt relief you’re eligible to receive.

UP NEXT: How to Apply for Student Loan Forgiveness

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