FAQ: School Loan Programs

The information on this page applies to HCLS programs:

• Health Professions Student Loan (HPSL)
• Primary Care Loan (PCL)
• Loans for Disadvantaged Students (LDS)
• Nursing Student Loan (NSL)

Schools that use a third-party loan servicer should communicate this information to the loan servicers and the borrowers.

Waiver of interest

During the COVID-19 public health emergency, HRSA waived interest on HCLS loans from March 13, 2020, until August 31, 2023. Interest on loans began to accrue on September 1, 2023.

Loan servicers must make the following changes, effective August 31, 2023:

• Adjust accounts so interest will resume on September 1, 2023.
• Notify borrowers of this adjustment and the current payment amount in advance of the due date.
• Apply any payments made during the relief period to the principal and interest balance.

Administrative forbearance and preparing for repayment to resume

HRSA allowed for an administrative forbearance ("COVID-19 Forbearance") from March 13, 2020, until August 31, 2023.

• Because the COVID-19 Forbearance ended August 31, 2023, borrowers must resume making payments.
• HCLS Borrowers with questions or concerns should reach out to their loan servicer. Your loan servicer can work with borrowers to help them understand their options.
• See the COVID-19 Forbearance Section on this page for additional details.

Frequently asked questions

On March 13, 2020, the president announced that interest would be waived on all federally held student loans for sixty days. However, The Coronavirus Aid, Relief and Economic Security (CARES) Act extended the waiver of interest for certain Department of Education student loans. Were loans through the HPSL, PCL, LDS, and NSL programs covered by these announcements?

While these provisions did not apply to these programs, HHS has authority to take certain actions. Due to the COVID-19 public health emergency, HHS instructed Schools and their loan servicers to waive interest on HCLS loans from March 13, 2020, through August 31, 2023. Interest on loans resumed on September 1, 2023.

How long was interest waived?

Interest was waived for the period of March 13, 2020, through August 31, 2023. Interest started accruing on September 1, 2023.

Will monthly payments go down because interest was waived?

Monthly payments may remain the same; however, if there are questions related to loan payments, borrowers should contact their loan servicer.

If borrowers made loan payments after March 13, 2020, how will those payments be applied?

During the period of COVID-19 Forbearance the full payment was applied to interest accrued prior to March 13, 2020, then to any outstanding principal balance.

Did defaulted loans accrue interest during the interest waiver period?

Defaulted loans did not accrue interest from March 13, 2020, until August 31, 2023.

Did the interest waiver also cover penalty interest rates imposed in cases of default?

Yes, the waiver on interest applied to all interest rates during the specified period, including those imposed on borrowers in default.

Loans paid in full between April 2020 and May 2020 included amounts for anticipated interest between March 13, 2020, and the date the loan was paid in full. Should Schools and loan servicers adjust interest retroactively from March 13, 2020, on accounts that are paid in full and refund the adjusted amount to the borrower?

Yes, retroactively adjust the interest, and return any overpayment to borrowers.

How will borrowers know when interest will start accruing again?

Loan servicers should inform borrowers when interest will start accruing again. The end date for the zero-interest period is August 31, 2023. Interest will start accruing on September 1, 2023.

With the interest on loans waived, must schools pay HRSA for the waived interest or absorb that unaccrued interest?

Schools will not be responsible for repaying HRSA or absorbing any portion of the interest waived. Schools are required to keep accurate and complete documentation to record the interest waived, consistent with grant requirements related to record-keeping.

COVID-19 Forbearance

How does capitalization apply to borrowers whose interest was past due prior to March 13, 2020?

Unpaid interest that accrued prior to the COVID-19 Forbearance will be capitalized and added to the principal amount beginning September 1, 2023, consistent with the standard practice for this program.

Does the COVID-19 Forbearance count against a borrower’s maximum allowable forbearance periods (if any) or against the borrower’s repayment period under the loan regulations?

The COVID-19 Forbearance does not count against the borrower’s maximum repayment period or maximum allowable forbearance periods. A borrower’s repayment period may be extended up to the maximum period of 10 years for NSL and 25 years for HPSL, LDS, and PCL programs. Borrowers may still request a forbearance due to extraordinary circumstances consistent with standard practice for these programs.

How should loans already in forbearance be handled?

HCLS Loans already in forbearance prior to the COVID-19 Forbearance stopped accruing interest starting on March 13, 2020. Interest accrual resumed on September 1, 2023. For additional assistance, please reach out to your loan servicer for additional information.

What happens if a borrower made partial payments while their loan was in forbearance?

Borrowers who made payments on loans during the COVID-19 Forbearance will not be penalized for making a payment that is less than the usual monthly payment amount. Borrowers still had the option to make a payment on their loan to make progress toward reducing the balance.

How should credit reporting entities handle forbearance?

HRSA does not have authority to dictate credit reporting entities' policies. We recommend borrowers reach out directly to the lending institutions/loan servicers to discuss any issues related to credit reporting.

What if the borrower cannot begin repayment of loans?

HRSA permits a school to grant forbearance whenever “extraordinary circumstances such as unemployment, poor health or other personal problems temporarily affect the borrower's ability to make scheduled loan repayments.” 42 C.F.R. § 57.210(a)(5). Borrowers who cannot make their payments after the end of the COVID-19 Forbearance may request a forbearance for extraordinary circumstances through their loan servicer’s typical process for forbearance.

Should borrowers placed with a collection agency prior to March 13, 2020, remain in collections?

Yes, borrowers already in collections should remain in collections. However, no interest should have accrued on their loans during the COVID-19 Forbearance.

For loans already in collections, will collection costs be waived during this period?

Revolving Loan funds can be used to cover the costs of collection of loaned principals and accrued interest and/or penalty fees. HRSA cannot waive the cost for the servicer to administer the loan. Cost of collection for HCLS programs should be charged according to the existing contract with the School.

Reporting requirements

Will HRSA require any special tracking or reporting for these loans/processes on the Annual Operating Report (AOR)?

At this time, we do not anticipate making any changes to the AOR to track these loans, but institutions maintaining a student loan program must continue to adhere to standard record-keeping requirements and HRSA reporting requirements.