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Dealing with Cancer and Student Loans

Student loan borrowers fighting cancer have help to manage their debt while they get treatment.

Written By: Michael P. Lux, Esq.

Last Updated:

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Editor’s Note: This article was originally published on September 25, 2017. About one year later, Congress passed a new law to protect cancer patients and the article has been modified to reflect this additional help. About one year after the law was passed, the form for borrowers to apply finally become available.

Facing cancer is a physical, emotional, and financial hardship of the highest order.  Sadly, there are no special provisions for cancer patients to manage their student loans while they face cancer.

The good news is that there may be some help around the corner.  [Update: The help is here but it is flawed… see the last section for more details and how to apply.]

Dealing with Cancer Right Now

For borrowers with federal student loans, there are a couple of options that can be pursued.

If cancer has created a situation where you are no longer bringing in an income, or your income has greatly dropped, an income-driven repayment plan is likely the best option.  Depending upon your income, monthly payments could be reduced to $0 per month.  This reduction would not reduce your loan balance — it will actually grow due to interest — but the months on an income-driven repayment plan will count towards student loan forgiveness.

If the income-driven repayment plan doesn’t drop payments to a low enough level, the next best option is likely a forbearance or a deferment.  There is no specific deferment or forbearance for cancer, but there are for financial hardships, including medical expenses, and fighting cancer should certainly qualify.  The major issue with going this route is that it is a short-term fix and the interest will continue to gather on your student loan account.  At best, it will have to be renewed every 12 months.

Borrowers with private student loans will similarly find a lack of support and resources for their student debt.  These companies have little incentive to help borrowers out and can be quite ruthless.  That being said, some lenders are better than others at dealing with special circumstances.  Your best bet is to call your lender and make sure you are working with someone who has the authority to provide your desired fix to your student loan situation.  If you want interest to stop collecting while in treatment — a long shot, but worth trying — make sure the person on the other end of the phone has the ability to fulfill your request.

Cancer and Student Loan Forgiveness

Unfortunately, dealing with cancer does not earn any sort of forgiveness or discharge on student debt.  The only way to have federal student debt forgiven under these circumstances is if you can show total and permanent disability.  Private loans will depend upon the terms of your loan agreement, but there likely isn’t a provision that will help you out.

Hope Around the Corner

There is currently legislation pending in Congress called The Deferment for Active Cancer Treatment Act of 2017.  This act would create a special deferment for people actively fighting cancer.  What would be unique about this particular deferment is that interest would not accuse during the deferment.  That would mean no payments and no interest for the duration of treatment and the six months that follow.

This legislation seems to be getting bipartisan support, so it is possible it could soon become law.  In an impassioned Op-Ed in The New York Times a cancer survivor recounts her time with cancer and dealing with student loans, noting that: “I still look back on the task of staying current with my loan payments as one of the most stressful parts of my treatment and recovery, and I hate to think of others’ having the same experience.”

Dealing with cancer is already hard enough.  Hopefully student loans will soon be an afterthought for all cancer patients.

Update: New Borrower Protections Become Law

In the fall of 2018, President Trump signed into law new protections for cancer patients who have federal student loans.

The new law allows patients to defer their student loan payments for the duration of active treatment.  They also have an additional six months after the treatment ends.

Though the legislation was supposed to go into effect the day it became law, issues with student loan servicers and the Department of Education have made it difficult for cancer patients to get the deferment that should be available per the new law.

Anyone currently fighting cancer should be given a deferment if it is requested… it just might be more difficult than expected.

We also should note that while deferments are typically not recommend (due to the accrual of interest), in this case, the cancer deferment also pauses interest on the loan as well.  This is one of the very rare situations where pausing repayment also pauses interest.

As of August, 2019, the form to apply for a cancer deferment has finally been made available. The ability to pause interest apples to both subsidized and unsubsidized loans, but it only applies to federal direct loans. Borrowers will FFEL loans will still be charged interest. Private loan borrowers will recieve no extra protection or assistance from this federal program.

The form to be completed by both borrower and doctor is available here.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

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