COLORADO SPRINGS — When you're trying to make ends meet during the economic challenges of COVID-19, the last thing you want to have to pay is for your student loan debt. While federal legislation has given some leeway to some loan borrowers, private loan borrowers were left to fend for themselves. In Colorado work is being done to bring relief to more people who have student loan debt.
In the U.S., there are more than 44 million student loan borrowers with a total debt of $1.5 trillion. That's an average of more than $32,000 of debt for each borrower. With that in mind, student loan payments during the financial stress of the COVID-19 pandemic can be crippling, but work is being done to provide relief and help you take control of your situation.
"Do I buy food or do I pay my student loans? No one should have to make that choice," said Colorado Attorney General Phil Weiser.
Colorado's attorney general spent most of his career in higher education. He knows during the economic hardships of COVID-19 and quarantine it's important that student loan lenders are fair to borrowers facing tough times.
"Part of what can really bury people is debt on top of debt which is to say you can't pay your principal, or your interest and then you start earning interest upon the interest and you get buried in a mountain of debt.," said Weiser.
The Federal CARES Act provided much needed relief for many borrowers with student loans including the suspension of monthly payments, interest, and involuntary collection activity until September 30th. However, the CARES Act left out millions of student loan borrowers with federal loans that are not owned by the U.S. government as well as loans made by private lenders.
"Don't just feel the stress and worry. Instead, ask for help," said Weiser.
Teaming together with other states Colorado's attorney general was able to get several loan companies to agree on an initiative to work with borrowers to provide similar relief as the cares act.
Student loan servicers participating in the initiative include:
Aspire Resources, Inc.
College Ave Student Loan Servicing, LLC
Earnest Operations, LLC
Edfinancial Services, LLC
Kentucky Higher Education Student Loan Corporation
Lendkey Technologies, Inc.
Higher Education Loan Authority of the State of Missouri (MOHELA)
SoFi Lending Corp.
Tuition Options, LLC
Utah Higher Education Assistance Authority (UHEAA)
Vermont Student Assistance Corporation (VSAC).
If a lender on this list is refusing to work with you on repayment options, Colorado's attorney general want you to reach out to his office: (720) 508-6000
"There are some providers now that are saying we're not going to do that to you. We're simply going to adjust your schedule and create one that works for you without deepening your hole that you might be in," said Weiser.
But what should you do if your student loan provider isn't a part of this agreement?
"So the first thing I would recommend doing if your loans haven't been paused is contact your lender and call up the loan servicer and ask them about options for financial relief," said Mark Kantrowitz of savingforcollege.com.
Unfortunately while this is all unfolding, COVID-19 scams continue to flourish. Colorado's attorney general warns student loan robocalls are a common tactic.
"If you want to get legitimate financing options research from reputable organizations upfront. Do not respond to unsolicited calls because all they're trying to do is get your money and leave you worse off," said Weiser.
Weiser says if you are planning on taking out a student loan in the future you should take a close look at the company you're working with and what kind of impact taking on that debt could have on you in the long-run.