When the CARES Act was passed, it included an automatic suspension of student loans held by the Department of Education until September 30, 2020. No interest will accrue during this period, and the six months of suspended payments will count toward federal forgiveness programs, like Public Service Loan Forgiveness.
That’s a lot of great news if you’re an eligible federal student loan borrower. Unfortunately, the CARES Act provides no coronavirus student loan relief for private student loan borrowers or borrowers who have FFEL loans held by commercial lenders.
This exclusion is a serious blow for private student loan borrowers who already aren’t eligible to join income-driven repayment (IDR) plans that are available to federal loan borrowers. Although the federal government isn’t currently offering private student loan relief, several states have taken it upon themselves to fill the gaps.
Below, you can find the states that are offering the best help for borrowers during the crisis and how to take advantage of student loan relief that’s available. You’ll also learn what you can do if your state doesn’t have any student loan relief 2020 options in place.
States offering the best private student loan relief in 2020
On April 21, 2020, Illinois Governor, J.B. Pritzker announced that a multistate agreement had been reached with 20 student loan servicers to provide student loan relief in 2020 for private and nonfederal student loan borrowers.
Here are the specific relief options that the agreement called for servicers to provide:
- 90 days of forbearance
- Waiver of late fees
- No negative credit reporting
- 90-day pause on student loan lawsuits
- Enrollment in borrower assistance programs
Which states are currently offering student loan benefits?
The measures included in this agreement were modeled after a similar agreement that had been announced by New York’s Department of Financial Services earlier in the month.
Here are the 10 states that are currently offering these student loan benefits as of May 14, 2020:
- New Jersey
- New York (via its own separate agreement)
In addition to the states listed above, the District of Columbia has also signed on to the agreement.
Which loan servicers are involved in the multistate loan relief agreement?
Here are the student loan servicers that have joined the agreement thus far:
- Aspire Resources, Inc.
- College Ave Student Loan Servicing, LLC
- Discover Financial Servicers
- Earnest Operations
- Figure Lending, LLC
- Kentucky Higher Education Student Loan Corporation
- Launch Servicing, LLC
- Lendkey Technologies, Inc.
- Reunion Student Loan Finance Corporation
- Rhode Island Student Loan Authority
- SoFi Lending Corp.
- Tuition Options
- United Guaranty Services, Inc.
- Upstart Network, Inc.
- Utah Higher Education Assistance Authority, and
- Vermont Student Assistance Corporation
As the economic impact of the pandemic takes its toll, it’s possible that more states and student loan servicers may sign on to this agreement later.
How to take advantage of coronavirus student loan relief benefits
If you live in any of the states listed above, your servicer may implement the 90-day forbearance automatically. If not, you can contact them immediately to request it.
You’ll also want to check to see if your lender plans to capitalize the interest that accrues during the forbearance period. Some companies have already announced that they won’t capitalize any interest that accrues during the three months of forbearance.
If your lender or servicer is failing to give you the relief promised in this agreement, you can contact your state’s attorney general’s office. You can also file a complaint with your state’s consumer protections office or the Consumer Financial Protection Bureau.
Other states offering student loan relief options
If you don’t live in any of the states listed above, you may still have some help available to you. Here are three more states that are offering assistance beyond what the CARES Act offers:
- Michigan: Michigan’s Treasury Department has suspended collection on all FFEL loans held by the Michigan Guaranty Agency. Missed loan payments will go unpenalized through September 30, 2020.
- North Carolina: The North Carolina Attorney General announced on March 26, 2020 that collection efforts would be suspended on all state-owned debts, including student loans, until further notice.
- Iowa: On April 24, 2020, Iowa’s governor announced a suspension of all wage garnishment except when necessary to enforce a domestic support order.
More states could decide to offer student loan relief in 2020 as part of their overall coronavirus relief efforts. Visit your state’s website to see the latest news on how they’re working to assist residents during the crisis.
What to do if your state doesn’t offer private student loan relief
If you don’t live in one of the states listed above, you can still contact your servicer directly to see if they’re offering student loan relief in 2020. Many lenders and servicers are offering some sort of relief to all of their borrowers, regardless of their state of residence.
For example, Navient, Nelnet and Earnest are each offering 90-day forbearances for student loan borrowers affected by the COVID-19 crisis. And Commonbond is offering “natural disaster forbearance” that won’t count against your standard forbearance options. See all the ways to get private student loan relief during the pandemic.