Federal Relief Options for Student Loan Borrowers Impacted by Natural Disasters
Federal student loan borrowers affected by wildfires in Southern California and other extreme weather events have options to help ease the burden of keeping up with payments during recovery.
What is a Natural Disaster Forbearance and How Does it Work?
The Heroes Act of 2003 offers relief to student loan borrowers affected by natural disasters, including a natural disaster forbearance. This option can provide temporary relief from payments, especially important with the increasing frequency and severity of climate-related disasters.
How to Access Relief During a Natural Disaster
Federal student loan servicers automatically identify impacted areas connected to disaster declarations through FEMA, with many borrowers being placed into a natural disaster forbearance without needing to apply. The forbearance can last up to 90 days, with possible extensions, while interest continues to accrue during the pause.
Additional Relief Options for Students and Delinquent Borrowers
Current students can qualify for an in-school deferment, even if unable to complete the school year due to a disaster. Delinquent borrowers can request a three-month suspension of collection activity by contacting the Education Department.
Ease of Accessing Relief Documentation
Loan servicers may request documents to verify eligibility, but extensions can be granted if disaster impacts make accessing paperwork difficult. Documentation may not be necessary, as proving being affected can be as simple as providing a home or workplace address.
Exploring Relief Options for Private Student Loans
Borrowers with private student loans may have limited disaster relief options compared to federal loans. However, reaching out to private lenders early can help explore available relief and prevent delinquency or default.
Overall, it’s important for student loan borrowers to be aware of the relief options available to them in case of natural disasters, experts suggest.