Is Your Student Loan Servicer Collecting Monthly Payments or Reporting During the COVID-19 Pandemic?
COVID-19 has affected everyone, including student loan borrowers. On March 13, 2020, FEMA declared the COVID-19 pandemic a natural disaster. Under the Coronavirus Aid, Relief, and Economic Securty (CARES) Act, Congress gave relief to certain student loan debtors. The Act gives relief for loans under the William D. Ford Federal Direct Loan Program, and Federal Family Education Loan Program (FFELP) which are owned by the United States Department of Education. It automatically suspends all payments and waives all interest from March to September 2020. Many borrowers have stopped making student loan payments under the CARES Act.
But the 6-month suspension on federally-held federal student loans leaves out an estimated one in five borrowers who owe on privately-held FFELP loans or Perkins loans. It is estimated that roughly 9 million federal student loan borrowers have at least one loan not covered by the CARES Act payment suspension.
Even if your loans are not covered under the CARES Act, you may still have some legal rights and protections, especially if you have been financially impacted by COVID-19.
Parasmo Lieberman Law is investigating whether debt collectors servicing FFELP loans are complying with federal and California laws. Some borrowers with FFELP loans may be entitled to an automatic forbearance or even restitution and/or money damages.
Some of the companies we are investigating include:
· Ed Financial
· Granite State
· Great Lakes
· MO HELA
If you made payments on a FFELP loan since March 2020, you may be entitled to legal relief. In order to evaluate if you have a case, we will need to review:
· your student loan account statements from 2020;
· records of payments in 2020 (which may be reflected in your account statements); and
· the loan's origination documents (typically the promissory note).
You can request your promissory note from your loan servicer and/or from the National Student Loan Data System (NSLDS). You will need to either make an account or log into NSLDS if you already have an account, here. Then go to "Documents," and look for your promissory note. You can also obtain basic details about your loans by going to "Dashboard," clicking "View Details," and then clicking "Download My Aid Data." You can also request this information directly from your servicer.
Last, but not least, the CARES Act creates special protections that change the way some creditors can report information to credit bureaus. If a consumer is current on their payments and received some form of payment relief from a creditor, and they comply with that financial hardship plan, the consumer's payment status should continue to be reported as "current."
If you received an accommodation, forbearance, payment deferral, or any sort of COVID relief on a federal student loan servicer, check your credit report to make sure this is reported correctly. (You can check it for free once a week here.). We are investigating whether student loan companies are following the credit reporting protections of the CARES Act.