Are Perkins Loan Payments and Interest Also Suspended During the COVID-19 Student Loan Payment Pause?

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This guidance is not award-year-specific and applies across award years.

This AskRegs Knowledgebase Q&A was updated on October 23, 2022 to reflect the Biden administration announcement, which further extends the federal student loan administrative forbearance period, the pause in interest accrual, and the suspension of collections activities for all federally held student loans.

Yes. Both payments and interest are automatically suspended on all federally held Federal Perkins Loans during the same period as the COVID-19 student loan payment pause. On a voluntary basis, schools that hold Perkins Loans may choose to provide the same suspension of interest and payments to the loans they hold.

Under the U.S. Department of Education's (ED's) latest extension, "Payments will resume 60 days after the Department is permitted to implement the [Biden Student Loan Forgiveness] program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current Term,” ED’s announcement reads. “If the program has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that.”

Federal Perkins Loans

 

Zero Percent Interest from March 13, 2020 Through End of Payment Pause

Suspended payments from March 13, 2020 Through End of Payment Pause*

Federally Held Perkins

Yes, automatically

Yes, automatically

Perkins Held By Schools

Yes, if school chooses*

Yes, if school chooses*

*For the same period, ED also authorizes schools the option to grant, at a maximum, a three-month forbearance on Perkins Loans for borrowers who are unable to make payments due to a COVID-19 interruption. Interest continues to accrue during this forbearance.

CARES Act and Presidential Memorandum: Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), there were no provisions for the suspension of Federal Perkins Loan payments or interest. The CARES Act only suspends payments and interest on all federally held Federal Direct Student Loans (Direct Loans) and Federal Family Education Loan (FFEL) Program loans (subsidized, unsubsidized, parent PLUS, graduate PLUS). However, ED's COVID-19 Emergency Relief and Federal Student Aid website says that the interest suspension also applies to federally held Perkins Loans. Also, the August 8, 2020 Presidential Memorandum includes all federally held student loans.

Electronic Announcements: The April 3, 2020 Electronic Announcement expands coverage to Federal Perkins Loans held by schools. On a voluntary basis, schools that hold Perkins Loans may choose to provide the same suspension of interest and payments to the loans they hold. For the same period, schools also may choose to grant a forbearance of up to three months on Perkins Loans for borrowers who are unable to make payments due to a COVID-19 interruption.

Please see ED’s COVID-19 Emergency Relief and Federal Student Aid website for more information, as that website is continuously being updated.

Note: According to guidance NASFAA has received from ED, the suspension of interest is not an incentive repayment plan created by the institution under 34 CFR 674.33(f).

Update Notes:

AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.