It was recently announced that, if you owe one or more private educational loans, you may be able to suspend payments on it for up to three months. However, unlike student loan debts you may owe to the federal government, you need to contact your private student loan’s servicer to request such a suspension.
Scott Buchanan, executive director of the Student Loan Servicing Alliance (SLSA) — which represents companies private lenders hire to administer their educational loans — indicated borrowers who owe these lenders need to call their loan servicers if they’re in distress. This is because every private lender has its own payment suspension policies and procedures.
However, there’s significant pressure on private lenders to give their borrowers payment suspensions, interest waivers, and other forms of repayment relief similar to what the government’s provided to borrowers who owe federally-held student loans. Just two days ago, 12 U.S. Senators wrote to 13 of the nation’s largest private educational lenders urging them to offer such relief.
Of course, private loan borrowers can continue making payments if they don’t want them suspended. Doing so will eliminate their private student loan debts more rapidly.
Will your private educational debt’s interest accumulation be waived during a payment suspension the way it is under the CARES Act for your federally-held loans? Or will such interest end up being added to your loan balance when your payment suspension expires? Each lender decides this, too, so inquire about how your interest will be handled when you contact your servicer about a payment suspension.
And what about payment suspensions and interest accumulation waivers on state and institutional student loans? Such actions are up to the state agencies and postsecondary schools to whom such loans are owed, so contact the agency or school from which you borrowed to request a payment suspension and interest waiver.
If your financial life has been disrupted due to coronavirus, you should at least look into opportunities to put all your student loan payments on hold. Don’t be shy if you need to do this. In these days of skyrocketing illness and unemployment rates, you’re not alone!
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