Federal student loansIf borrowers are concerned about making their payments while they recuperate, they have options for help from the wildfires tearing through Southern California.
The same is true for other individuals who are struggling with climate disasters and harsh weather and have student loan debt.
According to Carolina Rodriguez, director of the New York-based Education Debt Consumer Assistance Program, borrowers affected by natural catastrophes can be eligible for short-term relief from student loan payments.
According to experts, it’s a good idea for borrowers to become familiar with the relief options accessible to them in case they need it.
The National Oceanic and Atmospheric Administration reports that in 2023, there were a record 28 billion-dollar disasters in the United States, including tornadoes, droughts, and wildfires. As of November 2024, 24 weather and climate calamity occurrences had been confirmed, each with losses surpassing $1 billion.
In the event of a natural disaster, federal student loan holders should be aware of the following choices.
How a natural disaster forbearance works
According to higher education expert Mark Kantrowitz, the Heroes Act of 2003 offers several types of assistance to specific student loan borrowers who reside in or work in a region hit by a natural disaster. Forbearance for natural disasters is probably going to be one of the most beneficial solutions.
According to Kantrowitz, the frequency and intensity of natural disasters have increased due to climate change, making these waivers and forbearances more crucial.
In order to determine all affected locations associated with a disaster designation, the U.S. Education Department’s federal student loan servicers visit the Federal Emergency Management Agency website at least once per working day, according to Studentaid.gov.
According to Kantrowitz, the Department of Education frequently automatically places eligible debtors into a natural catastrophe forbearance.
In most cases, borrowers are not required to apply for this, he continued. However, borrowers may want to get in touch with their loan servicer to confirm that their payments are suspended.
The Education Department states that the natural disaster forbearance is valid for a maximum of ninety days. Borrowers may occasionally be given 30-day extensions. But the forbearance cannot last more than 12 billing cycles from the disaster date. (During the payment gap, loan interest keeps accruing.)
In the meanwhile, individuals who are able to make their payments and choose to refuse the automatic natural catastrophe forbearance should get in touch with the Education Department.
Assistance for present pupils and past-due debtors
Even if they are unable to finish the school year, borrowers who were enrolled in classes at the time of a natural disaster may still be eligible for an in-school deferment, according to Kantrowitz.
You or a family member can request a three-month suspension of collection activities from the Education Department if you or a family member is in default on your student loans.
‘Documentation may not be necessary’
You should be given deadline extensions if the disaster makes it difficult or impossible for you to get the documents your loan servicer may need to confirm your eligibility for the forbearance.
Given that records are frequently lost during a natural disaster, documentation might not be required, according to Kantrowitz. All you have to do is demonstrate that you are impacted. The request does not have to be in writing; it can be made verbally. (Giving the address of your house or place of employment may be sufficient to demonstrate that you are affected.)
Natural disasters have become more frequent and severe due to climate change, which makes these waivers and forbearances more crucial.
You can use yourStudentaid.govaccount to retrieve any student loan records that you may have misplaced due to a disaster.
Ineligible borrowers may have other relief options
According to Rodriguez of EDCAP, borrowers can still apply for a general forbearance with their servicer in order to request a temporary payment stop if the natural disaster is not federally declared or they are not considered eligible for the forbearance for any reason.
She also reminded borrowers that when they are not making payments, they may not receive credit toward a debt forgiveness program and that interest may still be charged on their debt during a forbearance.
“With your private student loans, you’ll probably have fewer options for disaster relief,” Rodriguez added.
However, in order to investigate available relief and avoid delinquency or default, she stated that it is imperative to contact private lenders as soon as possible.
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