Is Interest Suspended On Federally Held Loans While the Borrower Is In an In-School Deferment?

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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 COVID-19 federal student loan payment pause.

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 notice 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.”

Unfortunately, NASFAA is unsure at this time if the the interest suspension applies to federally held loans that are in an in-school deferment status. We have obtained second-hand information through a school from a loan servicer that the interest waiver does include those borrowers who are in an in-school deferment, but we have heard nothing directly from ED. We realize your students are asking about this; our advice is have them contact their loan servicer directly.

In the meantime, we have asked ED. As soon as we have a definitive answer to this question, we will update this AskRegs Knowledgebase Q&A and post it in Today's News.

Note: Under the CARES Act, accrual of interest is suspended from March 13, 2020 through the end of the student loan payment pause on eligible federal student loans. Since passage of the CARES Act, the suspension has been extended multiple times through presidential orders.

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.