FAQ: School Loan Programs

The information on this page applies to borrowers in these programs:

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

If you use a third-party loan servicer, you should communicate this information to them.

Waiver of interest

During the Covid -19 period, we waived interest on the above student loan programs from March 13, 2020, until June 30, 2023. Interest on loans will begin to accrue on September 1, 2023.

Loan servicers must make the following changes, effective July 1, 2023:

• Adjust accounts so interest will begin to accrue on September 1, 2023.
• Notify borrowers of this adjustment and the current payment amount in advance of the due date.
• Apply any payments during this period to the principal once all the interest that accrued prior to March 13, 2020, is paid.

Administrative forbearance and preparing for repayment to resume

HRSA allowed for an administrative forbearance from March 13, 2020, until June 30, 2023.

• After the administrative forbearance ended June 30, 2023, borrowers must resume making payments.
• Reach out to your loan servicer. Your loan servicer can work with you to help you understand your options.
• See the Administrative Forbearance Section below for additional details.

Frequently asked questions

Where can I get the latest information on changes to these programs?

Program updates will be posted to the School-Based Loans and Scholarships webpage.

Note: We updated these FAQs to reflect the end of the payment pause on HRSA Loan Programs.

Loan interest waiver

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

While these provisions do not apply to these programs, HHS has authority to take certain action in light of the COVID-19 national emergency. Utilizing this authority, HHS has instructed loan servicers for loans made through the HPSL, PCL, LDS, and NSL programs to waive interest on those loans from March 13, 2020, through June 30, 2023.

Student loan interest will resume starting September 1, 2023, and loan payments restart in October 2023.

How long will interest be waived?

Interest was waived for the period of March 13, 2020, through June 30, 2023. Interest will start accruing on September 1, 2023.

Will monthly payments go down because interest is being waived?

No. Monthly payments may remain the same; however, if there are questions related to loan payments, borrowers should contact their loan servicer.

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

During the period of no interest, the full payment will be applied to principal once all the interest that accrued prior to March 13, 2020, is paid. As noted below, payments may be suspended without additional interest accruing.

Will defaulted loans accrue interest?

Defaulted loans will not accrue interest from March 13, 2020, until June 30, 2023.

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

Yes, the waiver on interest will apply 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 paid interest that accrued between March 13, 2020, and the date they were paid in full. Should we adjust interest retroactively from March 13 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 June 30, 2023.

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

Schools will not be responsible for repaying HRSA or absorbing any portion of the lost interest revenue. Keep accurate and complete documentation to record the interest waived, consistent with the record-keeping requirements already in effect.

Administrative forbearance

How does the capitalization clause apply to borrowers that were past due prior to March 13, 2020?

Borrowers past due on their loan payment before the interest waiver began on March 13, 2020, were placed in forbearance, meaning they will not have additional interest calculated during this period. Interest on their outstanding loans will not be calculated again until September 1, 2023.

If you defaulted on your loan and the legal proceedings for the delinquent amount began prior to March 13, 2020, this extension may change the amount you owe. How do institutions handle this change in calculation of principal/interest amounts?

Since we don't know what the outcome of the litigation will be, HRSA reserves the right to make a final decision after the case is closed. For borrowers in litigation during the administrative forbearance period, outstanding and unpaid interest on the borrowers account will be accrued until a final legal decision is made.

Administrative forbearance counts as part of the 10-year repayment period. Does this mean your monthly payments will go up after payments resume to ensure your loan is repaid within 10 years?

Borrowers are still required to repay their loans within the 10-year period. We cannot extend the period of repayment. Speak to your loan servicer for additional guidance.

Does the borrower's loan repayment need to be recalculated for the waiver period?

Your loan servicer can work with you and the institution to recalculate your loan repayment amount in line with the 10-year or 25-year repayment requirement. (HRSA will provide updates if current policy changes)

How long did administrative forbearance last?

The administrative forbearance lasted from March 13, 2020, until June 30, 2023.

How should loans already in forbearance be handled?

Loans already in forbearance stopped accruing interest starting on March 13, 2020. Interest will resume on September 1, 2023. However, when the loan goes back into repayment status, any interest that accrued during the forbearance period before March 13, 2020, will capitalize, meaning that any outstanding interest will be added to the principal balance.

Can a borrower continue making partial payments while their loan is in forbearance?

As long as a loan is in forbearance, a borrower will not be penalized for making a payment that is less than the usual monthly payment. Borrowers still have the option to make a payment on their loan in order to make progress toward reducing the balance.

Will the interest that accrued on loans before the administrative forbearance began on March 13 be capitalized (added to the loans) at the end of the administrative forbearance?

Interest may be capitalized after June 30, 2023, depending on the loan 's status prior to March 13, 2020.

• If payments were up to date before the administrative forbearance period began, interest accrued prior to March 13, 2020, will not capitalize.
• If, before the administrative forbearance period began, the loan was in the type of deferment or forbearance in which interest would normally be capitalized, then interest accrued prior to March 13, 2020, will capitalize when the original deferment or forbearance ends, whichever is later.
• For borrowers in the grace period before the administrative forbearance period began, any outstanding or unpaid interest on the account will capitalize as usual when the loan enters repayment.

Does the COVID administrative forbearance count against a borrower's maximum allowable forbearance periods (if any) or against the borrower's repayment period under the loan regulations?

The maximum repayment period is 10 years for the NSL program and 25 years for the HPSL, PCL, and LDS programs, per the Public Health Service Act. The institutions have the discretion to extend the repayment periods to the maximum time periods. (We will advise and update the FAQs for loans already at their maximum repayment period.)

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 entity to discuss any issues related to credit reporting.

Loans in default

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 accrue on their loans for the period March 13, 2020, until a ruling has been made regarding the debt relief program, or June 30, 2023, whichever comes first, and loan servicers should place borrowers in an administrative forbearance during that period.

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

We cannot waive the cost for the servicer to administer the loan. However, since payments are suspended and no collection activities are occurring during the COVID administrative forbearance period, no additional collection costs should be charged.

Reporting requirements

Will HRSA require any special tracking or reporting for these loans/processes on the annual operating report (AOR) or annual performance report (APR)?

At this time, we do not anticipate making any changes to the AOR or APR (whichever is applicable to your grant) to track these loans, but institutions maintaining a student loan program must continue to adhere to standard record-keeping requirements.