Cancer Patient’s Loan Deferment Denied
In mid-2018, Congress passed a law stating that cancer patients who are actively undergoing treatment can defer any federal student loans they may have until six months after they’ve completed treatment. There are no penalties to this type of loan deferment, but there does appear to be an unwritten barrier to entry; when one woman tried to sign up for the program, she was denied despite being fully eligible.
52-year-old Julie Roberts has about $80,000 in unpaid federal student loans. She also has stage IV metastatic breast cancer and is undergoing treatment, as she will likely be doing for the rest of her life.
Roberts works as a pediatric speech-language pathologist and owns her own practice, but, after several rounds of chemotherapy, she’s been left unable to work because of the grueling treatment. “On some days I can’t walk from my bed to the bathroom,” she said.
For now, Roberts is employing an income-driven repayment plan which leaves her with a $0 monthly payment, but interest continues to accrue with each passing month that she’s unable to pay her student loans.
“It’s stressful enough having to go through the treatment,” she said, “and then on top of it you’re constantly worried: Am I going to be able to pay this student loan bill?”
But when Roberts called her student loan servicer, American Education Services, in early January to try to get her loans deferred, she was given several poor excuses for why she couldn’t do so, including, reportedly, that the bill had not yet passed into law and that she didn’t qualify.
Roberts obtained a letter from her doctor stating that she is, in fact, a cancer patient actively undergoing chemotherapy and soon to be undergoing surgery as well. However, she says, American Education Services refused to supply her with a way to send the letter to them.
After fighting with the loan servicer for a while, Roberts decided to bring in the big guns. She filed complaints with the Consumer Financial Protection Bureau and her congresswoman, Sheila Jackson Lee. Then she got a CNBC reporter on the case, after which she was quickly granted her deferment. But she was left wondering what would have happened if she hadn’t called a news station.
“Without a doubt, she is eligible,” said Mark Kantrowitz, one of the student debt experts CNBC called on to review Roberts’s case. “As a 15-year cancer survivor, I am outraged that a stage IV cancer patient would be given the runaround without any compassion.”
Around 400,000 to 1 million people are eligible for this type of loan deferment during cancer treatment. It is unclear at this time how many of these people have been unfairly informed that they don’t qualify by American Education Servies. We also don’t know how other loan servicers are handling the new law.
“This is the poster child for who this provision is supposed to help,” said Barmak Nassirian, the director of federal relations at the American Association of State Colleges and Universities.
The director of media relations at American Education Services said after the fact that it had all been a miscommunication error and that the company has taken corrective action to “ensure that this error remains an isolated case.”
Roberts can only hope that her story will make this process easier for other cancer patients in the future. “People with cancer are often already exhausted and overwhelmed,” she said. “Having to fight a huge, apathetic agency will often be more than they can handle.”
If you have U.S. federal student loan debt and are in active cancer treatment, you are eligible for a loan deferment. Contact your federal loan servicer for more details, but first, according to Kantrowitz, do your research. “Research your rights and the law before calling the lender. It will be harder for them to confuse you if you can cite chapter and verse of the law and regulations.”