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Some states are offering private student loan borrowers a chance to pause payments during the COVID-19 crisis. The payment pause and interest waiver provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) covers federal student loans, but not private student loans, hence this agreement.
Ten states have reached an agreement with nearly twenty lenders and servicers to provide financial relief to borrowers of private student loans in the states. Several banks are providing similar relief.
The ten states are:
- California
- Colorado
- Connecticut
- Illinois
- Massachusetts
- New Jersey
- New York
- Vermont
- Virginia
- Washington
The agreement covers about 90% of private student loans in these states.
The financial relief includes at least 90 days of forbearance, which suspends the repayment obligation on the private student loans. Interest continues to accrue during this payment pause, however, unlike the current federal loan payment pause.
The COVID-19 forbearance will not count against the one-year limit on forbearances on private student loans.
Participating lenders and loan servicers are also waiving late fees, suspending debt collection lawsuits and skipping negative credit reports on delinquent borrowers for 90 days.
The financial relief is not automatic, so borrowers will need to contact their lender or loan servicer to get it.
The agreement is similar to the one reached with the New York Department of Financial Services previously.
Which Private Loan Lenders are Offering a Payment Pause?
Participating lenders and loan services include:
- Aspire Resources, Inc.
- College Ave Student Loan Servicing, LLC
- Earnest Operations, LLC
- Edfinancial Services, LLC
- Figure Lending LLC
- Kentucky Higher Education Student Loan Corporation (KHESLC)
- Lendkey Technologies, Inc.
- Higher Education Loan Authority of the State of Missouri (MOHELA)
- Navient Corporation
- Nelnet, Inc.
- Reunion Student Loan Finance Corporation
- Rhode Island Student Loan Authority (RISLA)
- SoFi Lending Corporation
- Tuition Options, LLC
- United Guaranty Services Inc.
- Upstart Network Inc.
- Utah Higher Education Assistance Authority (UHEAA)
- Vermont Student Assistance Corporation (VSAC)
Several banks, including Citizens Bank, Discover Financial Services, Sallie Mae, Truist (SunTrust) and Wells Fargo are not part of the agreement, but are providing options to pause payments.
Sallie Mae says that it is offering its borrowers “a three-month suspension of student loan payments with no late fees, no impact to credit standing, and no collection efforts while the account is in forbearance.” Sallie Mae also offers a loan modification program for customers who experience more severe and/or longer-term hardship.
Navy Federal Credit Union and Prodigy Finance are also offering a 90-day payment pause.
CommonBond is offering a natural disaster forbearance that will last for the duration of the coronavirus national emergency.
At Savingforcollege.com, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.
