Private Student Loan Servicers Partner with Nine States to Provide Relief to Borrowers Impacted by COVID-19
The COVID-19 national emergency has caused unprecedented economic disruption. The federal government was quick to enact relief measures for federal student loan borrowers who may be experiencing financial hardship as a result of the pandemic. Last week, nine states announced a coordinated effort to partner with private student loan servicers and offer relief for private student loan borrowers.
The relief measures announced by these states are very similar to those announced by New York in early April. However, there are critical differences between these relief measures and those provided to federal student loan borrowers under the CARES Act. Those differences include whether relief measures are automatically applied to borrowers’ accounts, whether relief measures halt the accrual of interest on borrowers’ loans, the type of relief available, the duration of such relief, and whether the relief is mandatory or voluntary. This Legal Update provides an overview of the multi-state initiative and critical differences between this initiative and relief programs already in place.
Read more in Mayer Brown’s Legal Update.