Cancer Patients Can Now Defer Student Loans While Receiving Cancer Treatments. Here's How.
By Tracy L. Hirsch
If you or someone you know is undergoing cancer treatment, this information could provide much needed financial relief during a difficult season of life.
We all know that getting a cancer diagnosis is a terrifying experience in and of itself, and the treatments (chemotherapy, radiation, surgery, and the like) are grueling both physically and emotionally. Additionally, the financial burden that this places on many cancer patients creates an altogether heartbreaking situation.
Outside of costly medical bills, it can be nearly impossible to continue to pay other bills while undergoing treatment. Thankfully, a law was put into effect this past spring to alleviate some of that financial burden.
While the federal program got off to a rocky start, it is now in full effect, and anyone who is currently receiving cancer treatment or who was receiving cancer treatment, can apply for federal student loan deferment.
The U.S. Department of Education has released an updated request form for cancer patients to submit in order to have their student loan payments put on hold until they are finished with their treatment.
This initiative will give cancer patients the opportunity to suspend their student loan payments via deferment while they’re undergoing treatment. Depending on the type of federal loan, some patients might be able to defer payments without accruing interest.
The deferment period will last throughout the entire treatment period, and for six additional months after the treatment is completed. This can make a tremendous difference, as the alternative to deferment is forbearance, which does accrue interest that must be paid by the borrower while they’re undergoing treatment.
Thousands of young adults may soon find relief from the burden of student loans while undergoing cancer treatments.
Cancer patients, who have federal student loans and wish to defer their payments while receiving medical treatment, must submit a signed letter from their physician to their loan holder that verifies they are receiving cancer treatments (or were receiving them), along with the date range of treatment.
The deferment period is for one year, but if the treatments ends up going longer or the cancer returns, the physician can submit another letter for another deferment approval.
It’s been almost a year since Congress passed legislation to approve the deferment initiative for cancer patients. However, the official request form (the one that needs to be signed by a doctor and then submitted to the student loan lender) wasn’t officially made available by the Department of Education until this month.
Now that the Deferment Request Form is officially in place, the Department of Education expects that this will help at least 5,000 student loan borrowers who are eligible for the deferment.
In regards to eligibility, this deferment plan applies to federal student loans that were taken out on or after September 28, 2018, or federal student loans that were in repayment on or before that date. This means that this Deferment Program will mostly help young adults under the age of 45, but can also help older adults who have gone back to school in recent years.
The fine print is that there are only three federal loan programs that qualify for cancer treatment deferment. The eligible loans are loans that are part of the following federal programs:
- William D. Ford Federal Direct Loan Program (which includes Federal Direct Stafford/Ford Loans, Federal Direct Unsubsidized Stafford/Ford Loans, Federal Direct PLUS Loans, and Federal Direct Consolidation Loans)
- Federal Family Education Loan Program (which includes Federal Stafford Loans, Federal PLUS Loans, Federal Consolidation Loans, and Federal Supplemental Loans)
- Federal Perkins Loan Program (which includes Federal Perkins Loans, National Direct Student Loans, and National Defense Student Loans)
While there are certain limitations, and there have been some roadblocks in the implementation process over the course of this past year, this is a bipartisan issue that is getting support from both Republicans and Democrats alike.
Minnesota Democratic Representative Betty McCollum sponsored the deferment program, and views at as a win for young adults who have been diagnosed with cancer:
“This is a real success story for the 70,000 young adults diagnosed with cancer each year who can now defer their student loans, focus on beating cancer, and then return to their academic life. I hope that without having to worry about making their student loan payments, these patients will be able to focus on what is most important—beating their disease and getting healthy.”
While this deferment program is still in its early stages, this is a huge step in the right direction in terms of providing transient financial relief for cancer patients until they can get back on their feet.
While federal student loan holders were denying patients this past year, saying that there wasn’t an official deferment form for borrowers to submit (which understandably caused a lot of frustration and financial hardship for those in need), those borrowers should now have access to this program.
To find out if you or someone you know is eligible, you can visit the Federal Student Aid Website. If your family and friends would benefit from learning about this new initiative, please feel free to click the share button on our Facebook and Twitter posts. We believe that when there’s good news in the world, we should spread the word!
All the best,
Tracy L. Hirsch
Louisville Kentucky Bankruptcy Attorney
Hirsch Bankruptcy Law – No stigma. No shame.