On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed, suspending loan payments, stopping collections on defaulted loans, and setting a 0% interest rate.

The CARES Act has since been extended on Federal students loans until September 30, 2021.

Below are answers to frequently asked questions. If you still have questions, please contact an IonTuition advisor through your IonTuition account.

0% Interest

Which loans does the 0% interest rate apply to?

The 0% interest rate applies to all Federal loans own by the Department of Education (ED) including:

  • Direct Loans
  • FFEL Program Loans
  • Perkins Loans
  • HEAL Loans

Some FFEL, Perkins, and HEAL loans may be owned by commercial lenders or your school. You may be able to consolidate those loans into a Direct Consolidation Loan, but after the interest-free period ends, your interest rate could be higher. Talk to an IonTuition advisor about how your balance and payments may change. 

Unsure which loans you have or who owns them? Load your loan information into IonTuition.

Do I need to do anything to get 0% interest on my loans?

No action is required on your end. The interest on your Federal loans has been automatically adjusted.

Loan Status

What if my loans were already in forbearance/grace/deferment?

If you were in an interest-accruing status, your interest may be capitalized when the emergency relief expires. The balance on your unpaid interest will not increase during the emergency relief period. However, you can pay off unpaid interest now.


Should I refinance my student loans during this time?

There’s no reason to refinance Federal student loans currently receiving a 0% interest rate. If you currently have private loans with high-interest rates, it may make sense to refinance for better rates.


What about defaulted student loans?

All collections have been suspended on federally-owned defaulted loans, and no interest will accumulate.

If you were currently in a rehabilitation agreement, you will still receive credit for monthly payments even if no payments were made. If you did make payments, the full amount will be applied towards the balance of your loan.


What about student loan forgiveness?

You will still receive credit towards loan forgiveness programs, including income-driven repayment and PSLF, during the relief period even if you don’t make any payments.

There hasn’t been any indication that Federal student loan debt will be canceled or forgiven as a part of the CARES Act extension.


What happens if I continue making payments to 0% interest loans?

The full amount of your payments will be applied to your principal (after any outstanding balances or fees are paid). This can help you repay your loans much faster.

Should I continue making payments?

If you can afford to make your payments, we strongly recommend it.

We recommend staying in interest-free administrative forbearance and making payments as frequently as possible. Without interest, your full payment will go towards your balance and you’ll be able to repay your loan faster.

Can I get my payments back if I paid during the relief period?

Auto-payments have been suspended and payments processed during the relief period can be refunded to you. Contact an IonTuition advisor who can connect you with your servicer to request a refund.

You can also opt back into auto-payments while maintaining the 0% interest. 

When will I need to make payments again?

Currently, no payments are required until after September 30, 2021.

If you’re enrolled in auto-debit payments, it will resume automatically.

Your servicer will contact you before payments resume. Make sure your contact information is up to date.

Will my payment amount change when the relief period ends?

It’s possible your payment may change. Your loan servicer may recalculate your payment under standard, graduated, and extended plans to accommodate a lower principal balance against the remaining life of your loan period.

However, this period is excluded from your repayment plan, meaning if you had a 10-year standard repayment plan, the pay-off date will be extended to the same number of months as the relief period.

If you’re in an income-driven repayment plan, your payment amount will return to the original amount until you recertify a new income.