By: Annie Nova
From: cnbc.com
- At issue seems to be this: The Education Department hasn’t provided the companies that administer its federal student loan programs with an official application for borrowers to apply for the deferment, even though the law has been in effect for more than six months.
- “It sounds like Congress wanted to do a good thing – and I feel like I’m not even getting half of what they intended in the law,” said Peter Tanner, who was diagnosed with stage 4 bowel cancer last year.
On Sept. 28, 2018, President Donald Trump signed into law a bill allowing people with cancer to put their student loan payments on hold. The rollout of the new program has been rocky.
The Education Department, in a notice in the Federal Register, writes: “The law was immediately effective, meaning that borrowers can immediately request and, if eligible, should receive the deferment.”
That’s not happening. Cancer patients with student debt hoping to get this new break from their monthly bills are running into a wall.
At issue seems to be this: The Education Department hasn’t provided the companies that administer its federal student loan programs with an official application for borrowers to apply for the deferment, even though the law has been in effect for more than six months now.
“From talking to a couple of loan servicers about this, they have been frustrated by the lack of direction that they’ve gotten from the Department of Education,” said Colleen Campbell, associate director of postsecondary education at the Center for American Progress.
The Education Department is taking steps to create and issue an application for the deferment. Still, the delay is frustrating to sick borrowers like Peter Tanner, who was diagnosed with stage 4 bowel cancer last year and owes more than $15,000.
Up to 1 million borrowers could be eligible for the new deferment, according to estimates by Mark Kantrowitz, an expert on student debt. The requirements are: a person needs to owe money on federal student loans and be in active treatment for cancer. Once approved, borrowers can pause their bills throughout their medical care and then for six months afterward.
“It sounds like Congress wanted to do a good thing – and I feel like I’m not even getting half of what they intended in the law,” Tanner, 40, said.
Throughout the last year, Tanner has spent weeks in the hospital, had three abdominal surgeries and lost more than 70 pounds.
He said he was grateful and relieved to learn that Congress was offering a reprieve for borrowers with cancer. His medical costs have already forced him to take out a home equity loan on his house and lean on his credit cards.
Tanner called Mohela, his student loan servicer, in February. He was put on hold multiple times, he said, and then was delivered the bad news: “The bottom line they gave me was, ‘We don’t have an official application from the U.S. government,’” Tanner said. ”‘Until we get that, we can’t enroll you in this program.’”
In the meantime, he said he was told the servicer would put his loans into a temporary forbearance, during which his payments would be paused but interest would continue to collect on his debt. (Under the new cancer deferment, interest is suspended.)
“They were very clear, ‘The interest will continue,’” he said, “They weren’t going to do anything in line of trying to get me into a full deferment via the program.”
Barbara Jacoby is an award winning blogger that has contributed her writings to multiple online publications that have touched readers worldwide.