The New York State Department of Financial Services (DFS) announced on April 7, 2020, that it reached a deal to help those with private student loans, as well as those with commercially-owned Federal Family Education Loan (FFEL) program loans, who've been affected by the coronavirus, but aren't covered by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The DFS made the agreement with Navient, Nelnet, the Pennsylvania Higher Education Assistance Agency (PHEAA), the Missouri Higher Education Loan Authority (MOHELA), EdFinancial, and others. These servicers represent about 90% of privately-held student loans in the state. So, if one of these servicers handles your private student loans, those loans are covered. Also, the agreement covers commercially-owned Federal Family Education Loan (FFEL) program loans. It's expected that the agreement will provide relief to as many as 300,000 New Yorkers.
The CARES Act, on the other hand, applies only to Direct Loans, as well as FFEL loans, but only those FFEL loans that are owned by the U.S. Department of Education—not FFELs that are owned by other entities. Borrowers with private student loans and Perkins Loans held by entities other than the Department of Education also don't get relief under the federal stimulus plan.
Under the DFS agreement, New Yorkers with eligible loans who've been impacted by COVID-19 can get different forms of loan relief, including a (minimum) 90-day forbearance on payments and a waiver of late payment fees for 90 days.
Also, the servicer has to:
Don't just stop making your payments, though. Borrowers have to contact their student loan servicer to get relief.
This relief is in addition to Governor Cuomo's announcement on March 10, 2020, that the state will temporarily stop the collection of student debts owed to the State of New York and referred to the Office of the Attorney General for collection, for at least 30 days. Also, the Governor's signed FY 2021 budget sets standards for the student loan debt relief industry in New York to protect borrowers from abusive debt relief scams.
Visit the DFS website to learn more about available student loan relief in New York.
Effective date: April 7, 2020