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D.C. Residents Grapple With Student Loan Debt During Pandemic

The D.C. attorney general and the Student Borrower Protection Center (SBPC) hosted an online webinar sharing strategic advice and information for those District residents struggling to repay private student loans while battling financial hardship induced by the coronavirus pandemic.

Attorney General Karl Racine has publicly shared his support of the D.C. Council working to put legislation in place that will help lessen the financial load of families and individuals during the pandemic.

“The last thing that District residents who are experiencing financial hardship need is to be harassed by debt collectors,” Racine said. “I am grateful that the council has passed legislation that restricts most debt collection actions until after this emergency is over.”

In October, Black women ranked as having the highest amount of student loan debt of all races revealed in a study conducted by the American Association of University Women. The District of Columbia has recently moved legislation in place to acknowledge and relieve those individuals stifled by student loan payments likely embroiled with other financial burdens during the pandemic.

On March 27, The Trump administration, as part of its response to the economic fallout from the pandemic, passed what is known as the CARES Act, legislation geared towards assisting families and business owners drowning in financial debts amid the nationwide shutdown.

The legislation legally suspended any student debt payments until September, including for those who are in forced collections such as wage garnishment.

“The courts will reopen, and I think it’s important to understand that if you are in default on a student loan you might end up subject to a lawsuit by a private creditor sooner rather than later, and I think it’s very important to know your rights when that happens,” said Walter Suskind, SBPC deputy director of communications.

Ben Wiseman of the attorney general’s office informed webinar attendees of emergency legislation that has been passed in the District, prohibiting debt collection during the mayor’s declared emergency and 60 days thereafter.

“If you are facing a debt collection activity that you believe violates that law during that time period, please contact our office,” Wiseman said.

Suskind presented varying options to help manage individual’s student loan debts, including the Income-Driven Repayment Plan (IDR), available through student loan companies for those who find themselves ineligible or not covered under the current legislation. Essentially, if one’s loan company is not instituted under the federal government — they are not covered under the present legislation.

“Right now for borrowers that are covered by the CARES act, student loans that are covered are interest-free until the end of September,” Suskind said. “So some of these benefits of IDR aren’t super-important right now, but they will be once the CARES Act expires in September because they can help you manage interest that’s accruing on your student loans while you’re not making very large payments on them.”

Today, there are roughly 9 million people under this circumstance, particularly those invested in private student loans. The income-driven repayment option provides a way for residents to get current on their loans without having to pay any debt collector.

“We are continuing to advocate for pauses in new debt-collection lawsuits by these private creditors, including student loan borrowers,” Suskind said. “Not just now, but for the foreseeable future because the economy is not getting better and people are going to continue experiencing stress.”

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