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Student Loans

Updated 9/6/2023

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Federal student loans

The federal CARES Act provided help for some federal student loan borrowers:

  • It provided relief for federal Direct Loans and federally held FFEL (Federal Family Education Loan Program) loans.
  • If your loans were covered by the law, you should have received a notice that your Direct Loan and covered FFEL payments were suspended.
  • In June 2023, Congress passed a law that set a date for when you will need to restart payments for your student loans. Student loan interest will resume starting on September 1, 2023, and payments will be due starting in October 2023.
  • Learn more about restarting payments in October 2023 on the studentaid.gov website.
  • While your payments are suspended, the interest rate on your covered loans will be 0%.
  • Suspended loan payments will be treated as if the payment was made for purposes of loan forgiveness and loan rehabilitation.
  • There will be no negative credit reporting on your loan accounts while your payments are suspended.
  • For Direct Loans and federally held FFEL loans already in default, all collection activity will be suspended. This means your wages will not be garnished, taxes will not be offset, and benefits will not be offset.
  • Making payments during the payment pause could help you pay down your loan balance more quickly. The full amount of your payments will be applied to your principal balance once you’ve paid all the interest that accrued prior to March 13, 2020, and any fees (for defaulted loans).

How do I know what kind of loan I have?

It may be hard to tell at first glance if you have a private or a federal loan. Many private student loan lenders also manage and service federal student loans. You may have both federal and private student loans.

To find out, visit this page of the Student Loan Borrower Assistance website.

TPD reporting

The US Department of Education is waiving income monitoring and reporting requirements during COVID for borrowers who received a discharge due to total and permanent disability (TPD). In addition, borrowers with loans that were reinstated for failure to provide earnings documentation are being restored to discharge status, and will be refunded any payments made following loan reinstatement. Learn more about this student loan help.

Student loan forgiveness plan was blocked

On August 24, 2022, the U.S. Department of Education (DOE) announced student loan forgiveness of up to $20,000 for eligible Americans.

On June 30, 2023, the U.S. Supreme Court issued a ruling that essentially blocks this student debt relief program.

The U.S. Department of Education explains the impact of this decision on the Federal Student Aid website.

Private student loans

The State of Vermont mandated that private lenders should work with student-loan holders to provide help. If you have a private student loan — including one from Vermont Student Assistance Corporation (VSAC) — contact your student loan servicer or lender to identify the options that might apply to you. They include:

  • providing forbearance (postponement) of payments for at least 90 days
  • waiving late-payment fees
  • protecting borrowers from negative credit reporting
  • ceasing debt-collection lawsuits for 90 days, and
  • enrolling in appropriate assistance programs, such as income-based repayment.

Borrowers with private student loans can look for contact information on their monthly billing statements. VSAC borrowers may call 1-833-802-8722.

Learn more about this help and where to turn if you have a complaint on the Vermont Department of Financial Regulation (DFR) website.

General student loan resources

Need help?

If you have a low income and you are having trouble with your federal student loan payments, contact us. Fill out our form and we will call you back. Your information will be sent to Legal Services Vermont, which screens requests for help for both Vermont Legal Aid and Legal Services Vermont. You can also call us at 1-800-889-2047.

Updated: Sep 07, 2023