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Are there any programs to help pay student loans? Have deadlines to apply for financial aid changed?
Federal Student Loans
Student Loan Payments to Restart After Jan. 31, 2022
To provide relief to student loan borrowers during the COVID-19 national emergency, under the CARES ACT, federal student loan borrowers were automatically placed in an administrative forbearance, which allows you to temporarily stop making your monthly loan payment.
The U.S. Department of Education announced a final extension of the student loan payment pause until Jan. 31, 2022. The pause includes the following relief measures for eligible loans:
- a suspension of loan payments
- a 0% interest rate
- stopped collections on defaulted loans
Once the payment suspension ends, you'll receive your billing statement or other notice at least 21 days before your payment is due.
For more information, please refer to this frequently asked questions page from the United States Department of Education.
State Financial Aid Programs
Due to the current crisis, New Jersey College Loans to Assist State Students (NJCLASS) borrowers may be experiencing unemployment, illness, or other changes that have reduced their earnings. The Higher Education Student Assistance Authority (HESAA) offers several repayment relief options.
If you are ill, unemployed, or experiencing some other type of financial hardship, you may apply for one of the following relief options:
- Temporary Total Disability: Click Here for the Application
- Unemployment: Click Here for the Application
- Financial Hardship: Click Here for the Application
For more information about HESAA's relief programs and how to apply, HESAA has created a reference guide.
There is no fee to apply for any of the relief options, and HESAA has never charged borrowers late fees.
During this public health emergency, HESAA has also suspended the use of wage garnishments and withholding of state income tax refunds to collect on past due loans.
Note: New legislation directs the Higher Education Student Assistance Authority (HESAA) to exclude the Spring 2020 semester from a student's total lifetime eligibility limits for all state financial aid programs if a student is unable to finish the semester due to the ongoing COVID-19 pandemic. Additionally, students who withdrew or reduced credits during this time will not have to repay the state financial aid amounts that the student would have had to return under previous law.
Private Student Loans
The State has secured relief options with private student loan servicers to expand on the protections the federal government granted to federal student loan borrowers. These new options stand to benefit an estimated 200,000 New Jerseyans with privately held student loans.
New Jersey residents with commercially-owned Federal Family Education Program Loans or privately held student loans who are struggling to make their payments due to the COVID-19 pandemic will be eligible for expanded relief.
Borrowers in need of assistance must immediately contact their student loan servicer to identify the options that are appropriate to their circumstances. Relief options offered by participating servicers include:
- Providing a minimum of 90 days of forbearance relief for borrowers;
- Waiving late payment fees for borrowers;
- Ensuring no borrower is subject to negative credit reporting;
- Ceasing debt collection lawsuits for 90 days; and
- Working with eligible borrowers to enroll them in other applicable borrower assistance programs.
This is an initiative that servicers have opted into. Borrowers should contact their servicers to utilize the relief options.
Residents who have questions or are experiencing trouble with their student loan servicer may contact the New Jersey Department of Banking and Insurance Consumer Hotline at 1-800-446-7467 or file a complaint online.
Source: https://studentaid.gov/announcements-events/coronavirus; dobi.nj.gov; https://nj.gov/governor/news/news/562020/approved/20200421b.shtml; https://www.hesaa.org/Documents/Misc/NJCLASS_Q_n_A.pdf; https://www.hesaa.org/Pages/HESAANewsPage.aspx?type=News&pid=174; https://www.nj.gov/governor/news/news/562020/approved/20200515e.shtml;