Student loan payments stopped for a specific period, then resumed

During the COVID-19 pandemic, the Trump administration issued an executive order in March 2020 that paused federal student loan payments and set the interest rate to zero. This pause lasted from March 2020 through December 2020 under Trump's order. Payments were set to resume in January 2021, after Trump left office. The Biden administration later extended this pause multiple times, keeping payments frozen until late 2023.

The pause applied to most federal student loans — Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans held by the Department of Education. Private student loans were not affected by this pause. During the pause period, borrowers did not have to make monthly payments, and no interest accrued on their loans.

Key Takeaways

  • Trump's executive order in March 2020 paused federal student loan payments and set interest to zero for the remainder of his term.
  • The pause was originally set to end in December 2020, but the Biden administration extended it multiple times after taking office.
  • Private student loans were never included in any payment pause — only federal loans held by the Department of Education.
  • Borrowers who continued making payments during the pause had their payments applied to their loan balance, though they were not required to pay.

Why the pause happened and how long it lasted

The pause was created as a response to widespread job loss and economic hardship caused by the COVID-19 pandemic. The executive order allowed borrowers to stop making payments without penalty while they dealt with the financial impact of lockdowns and business closures. The initial pause ran from March 13, 2020, through December 31, 2020.

When Trump's term ended in January 2021, the pause was set to expire. However, President Biden issued his own executive order extending the pause through September 2021. This extension was renewed several more times over the following two years, with the pause ultimately lasting until late 2023 — nearly four years total from the original order.

Which loans were covered and which were not

The pause covered federal student loans serviced by the Department of Education. This included Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. Federal Family Education Loans (FFEL) held by the Department of Education were also covered, as were Perkins Loans.

Private student loans were not included in the pause. If you borrowed from a private lender — such as a bank, credit union, or private loan company — your payments continued as normal. Parent PLUS Loans that were privately held also continued requiring payments. The pause only applied to loans owned or serviced by the federal government.

What happened to interest during the pause

During the entire pause period, the interest rate on covered federal loans was set to zero percent. This meant that even though borrowers were not required to make payments, no new interest was being added to their loan balance. Any payments made during the pause went directly toward reducing the principal amount owed.

This was different from a standard deferment or forbearance, where interest typically continues to accrue. The zero-interest feature meant borrowers could make voluntary payments if they chose to, and those payments would have a direct impact on what they owed.

What borrowers could do during the pause

Borrowers had several options during the payment pause. They could choose to make no payments at all and let their loans sit with no interest accruing. They could also continue making voluntary payments if they wanted to reduce their balance faster. Some borrowers used the pause period to catch up on other debts or build emergency savings.

Borrowers could also change their income-driven repayment plan during the pause, or explore other options like loan consolidation. The pause did not prevent borrowers from taking action on their loans — it straightforward removed the requirement to pay and the accrual of interest.

When payments resumed and what changed

Federal student loan payments resumed on October 1, 2023, after the pause ended. Borrowers were required to start making payments again, and interest began accruing on loans that had been paused. The Department of Education sent notices to borrowers several months before the restart date to give them time to prepare.

When payments resumed, the interest rate returned to the borrower's original rate — it was not permanently set to zero. Borrowers who had made voluntary payments during the pause had reduced their principal balance, which meant their monthly payments would be lower than they would have been without those extra payments.

How the pause affected loan forgiveness programs

The pause period counted toward Public Service Loan Forgiveness (PSLF) and other forgiveness programs. Borrowers working in public service jobs received credit for the months they were not required to make payments, as if they had made on-time payments. This meant the pause actually helped borrowers progress toward forgiveness without having to pay.

For borrowers pursuing income-driven repayment forgiveness, the pause also counted as may have access to payments. This allowed borrowers to move closer to the 20 or 25-year forgiveness timeline without making actual payments during those months.

Frequently Asked Questions

Did Trump cancel student loans?

No. Trump paused payments and set interest to zero, but the loans still existed and had to be repaid. The pause was temporary relief during the pandemic, not forgiveness or cancellation. Payments resumed in October 2023.

Were private student loans included in the pause?

No. Only federal loans held by the Department of Education were paused. Private loans from banks and other lenders continued requiring payments throughout the pause period.

What happened if I made payments during the pause?

Your payments were applied to your loan balance and reduced what you owed. You were not required to pay during the pause, so any payments you made were voluntary and helped you pay down your principal faster.

Did the pause help with Public Service Loan Forgiveness?

Yes. The months during the pause counted as may have access to payments toward PSLF, even though you were not required to make actual payments. This helped borrowers progress toward forgiveness without paying during that time.

Can the pause happen again?

That depends on future executive orders or legislation. The pause was created through an executive order, which means a future president could issue a similar order. Congress could also pass legislation to pause payments, but that would require legislative action rather than an executive order.