Everything You Need to Know About Student Loans and the CARES Act Expiration

By Kassondra Cloos | Published on October 21, 2025

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Soon after business closures started in March 2020 to contain the coronavirus pandemic, Congress passed the CARES Act¹. This federal program offered widespread assistance programs in the face of a national emergency. In addition to several rounds of direct stimulus payments, CARES expanded unemployment benefits to help independent contractors and part-time gig workers and immediately froze student loan payments and interest accrual on federally-funded loans.

The student loan forbearance element of the CARES Act expires on June 30, 2023.  If the debt cancellation has not been implemented or the litigation has not been resolved, student loan payments are set to resume September 30, 2023. Here are all your CARES Act FAQs so you can be prepared when your payments restart.

CARES: Student Loans, Rent, and Unemployment

The public health emergency that forced lockdowns across the country led to widespread layoffs and furloughs, especially in the restaurant and travel industries. This created a ripple effect of problems: it’s hard to pay your rent and your student loans when you don’t have an income.

To help student loan borrowers, the CARES Act automatically put all federal loans into forbearance, which means no payments were required and no interest would be accrued. It was originally set to expire in September 2020, but was renewed many times. It is now expected to expire on June 30th, 2023.

In addition, the CARES Act offered economic aid to unemployed gig workers and self-employed freelancers, small businesses, schools, and renters, through a set of loans, grants, and protections intended to prevent people from falling too far behind financially during lockdowns.

Who cares about CARES?

The CARES Act immediately provided relief for federal student loan borrowers by allowing people to stop making their monthly payments. Before the COVID pandemic, anyone struggling to pay federal student loans could ask to restructure their payments, either by switching to an income-based repayment plan or getting their loans deferred due to hardship. What was different about the CARES Act provisions was that it also froze interest accrual, so anyone who took advantage of the payment pause did not see the balance of their loans increase.

CARES also offered billions of dollars to small businesses. The Paycheck Protection Program—more commonly known as PPP loans—offered businesses up to two rounds of forgivable loans equal to 10 weeks of payroll expenses for any staff members they would continue to employ during the pandemic. Families struggling to pay rent were protected by an eviction moratorium, and the CARES Act also offered additional stimulus payments to parents.

Freelancers and gig workers aren’t traditionally eligible for regular unemployment benefit programs because they don’t pay into unemployment insurance through their jobs. But they were able to receive weekly payments under the Department of Labor’s Pandemic Unemployment Assistance, or PUA. Their benefit amount was based on income reported to the IRS on the previous year’s tax return.

Unemployment benefits are administered at the state level, but PUA offered federal funding for broader support to provide better economic security. Essentially, anyone whose employment was affected by COVID, like people who couldn’t telework and people who couldn’t work in order to care for a family member, was eligible for higher benefits for additional weeks than states are traditionally willing to pay them. Claimants also received automatic extra payments from the federal government in an effort to replace people’s full income while they were unemployed due to the pandemic. The number of weeks of unemployment people can receive under PUA has been extended several times. State laws regarding weeks of benefits people are eligible for have varied.

Past CARES extensions

The pause on student loan payments and interest has been extended several times. It was first set to expire on Sept. 30, 2020, but was soon pushed to Dec. 31, 2020, then Jan. 31, 2021. On President Biden’s first day in office, he extended the pause once again to Sept. 30, 2021. In late August, he pushed the date once again to December 31, 2022. On November 22, 2022, he announced he pushed the date out once again to June 30, 2023.

Biden has said his latest extension will be the last, and it’s likely he means it this time. Although the economy has not yet fully recovered from the pandemic, other parts of the CARES Act have also been allowed to expire, like the eviction moratorium and the additional payments once offered under PUA. The Small Business Association, or SBA, has not offered additional rounds of PPP loans since Spring 2021.

Once the CARES Act’s forbearance expires, borrowers will have to start making monthly payments again at the interest rates they had before the CARES Act kicked in. That means the current 0% interest rate will end on December 31, 2022, and federal loans will immediately start accruing interest again at the rate you were offered when you first signed for the loans.

You should expect to receive a billing statement about three weeks before your payment’s due date. You can get additional information about payments resuming at studentaid.gov.

What’s next?

If you’re looking to lower your student loan payments once the freeze ends, refinancing may save you money in the short-term and over time. Interest rates are low right now, which means it’s a good time to lock in a lower rate. Once the economy starts picking back up, interest rates are likely to start rising in short order.

If you work in qualifying public service industries or nonprofits that are eligible for public service loan forgiveness (PSLF), you might want to wait—forgiveness could save you thousands of dollars depending on how much debt you have left. If you’re not qualified for PSLF, however, refinancing to lower your interest rate can help you get out of debt faster by allowing you to pay your principal balance more quickly.

If you’re curious about refinancing², Earnest has some of the lowest rates and you can check your rate in 2 minutes without any credit impact . This way, you’ll get an idea of any potential savings before making a decision.

Conclusion

Since March 2020, the CARES Act has helped keep people afloat through stimulus payments, expanded unemployment benefits, and a freeze on federal student loan payments and interest. The CARES Act expiration is likely to cause some confusion for borrowers for a period of time, but you can get ahead by making a plan for how you’ll react once you have to start making payments again.

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About the Author

Kassondra Cloos

Kassondra Cloos is a writer, editor, and former Earnest client. She refinanced her own student loans with Earnest after graduating and has first-hand experience with the refinancing process. She has been writing about personal finance and student loans since 2017. She also writes about sustainable travel and adventure for The Guardian, Outside, Backpacker, and many other publications. You can find more of her work via her travel newsletter, Out of Office.