What Student Loans Qualify for the CARES Act?

On March 27, 2020, the president signed the CARES Act which provides broad relief for “federal student loan borrowers” (you can read more about the benefits).

It’s important to understand what student loans qualify for the CARES Act, as it doesn’t apply to all student loans. So do your loans qualify for these benefits?

Who are “federal student loan borrowers”?

Specific to the CARES Act, it mainly applies to student loans backed by the federal government where the lender is also the federal government (e.g., the U.S. Department of Education).

What type of student loans qualify?

Direct Loans:

  • Department of Education’s federal student loan program called William D. Ford Federal Direct Loan “Direct Loan” Program
  • Lender: U.S. Department of Education
  • Types: Four types include direct subsidized loans, direct unsubsidized loans, direct PLUS loans, direct consolidation loans (also called Stafford loans)
  • Does it qualify? Yes (payment suspension and 0% interest)
  • Who might have it? If you took out student loans after 2010 and borrowed from the government through your school

Federally held FFEL, Perkins or Parent PLUS Loans (see below for specifics)

What type of student loans don’t qualify?

Federal Family Education Loans (“FFEL”):

  • Department of Education’s federal student loan program called Federal Family Education Loan Program (discontinued in 2010)
  • Lender: Varies (private financial institutions, state-level lenders, U.S. Department of Education)
  • Types: Four types include subsidized loans, unsubsidized loans, federal PLUS loans, federal consolidation loans (also called Stafford loans)
  • Does it qualify? only if held by the U.S. Department of Education (most are not)
  • Who might have it? if you took out student loans before 2010 and borrowed from the government through your school
    Perkins Loans:
  • Department of Education’s federal student loan program called Perkins Loans for students with exceptional financial need (discontinued at the end of 2017)
  • Lender: Varies (your school, Department of Education, other)
  • Does it qualify? only if held by the U.S. Department of Education (most are not)
  • Who might have it? If you took out student loans before June 30, 2018, and you demonstrated exceptional financial need

Parent PLUS Loans:
See above for Direct Loans and FFEL.

Private Student Loans:
These will not qualify. If you are having trouble making payments, you can still contact your servicer directly to see if they have programs to stop payments.

What can I do if I don’t qualify?

For FFEL, Perkins, or Parent PLUS Loans, they can be consolidated into a Direct Loan if they don’t qualify. This will change the loan type to a Direct Loan and it will then be eligible for the benefits.

Where can I check what type of student loan I have if I’m not sure?

There are a few ways to see if your student loans qualify:

  • You can go to the Federal Student Aid site (the login will be what you used when you applied for the FAFSA) and look at your student loans (the lender should be listed as the U.S. Department of Education)
  • You can contact the servicer of your student loans
  • You can reach out to Snowball directly
    Sign up for Snowball Wealth to see the latest on your student debt, and how to take advantage of the CARES Act!

At Snowball Wealth we take a look at your full loan picture to see how much you are paying in interest and provide personalized goals and recommendations on how and when to pay off debt. You can sign up here.

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