Will Loan Payments Suspended Due To Coronavirus Count Toward Loan Rehabilitation?

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

Yes. According to the December 11, 2020 Federal Register and the U.S. Department of Education's (ED's) Coronavirus and Forbearance Info for Students, Borrowers, and Parents website, suspended payments count toward Direct Loan and Federal Perkins Loan rehabilitation under 34 CFR 685.211(f) and 674.39(a). According to guidance NASFAA has received from ED, each month's suspended payment counts as if the borrower made an actual payment towards rehabilitating the loan.

Note that loan rehabilitation is not the same as making satisfactory repayment arrangements to clear a defaulted loan. See AskRegs Knowledgebase Q&A, Will Loan Payments Suspended Due To Coronavirus Count Toward Satisfactory Repayment Arrangements?

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.