WASHINGTON PART OF MULTI-STATE STUDENT EDUCATION LOAN SERVICER INITIATIVE TO PROVIDE BORROWERS FINANCIAL RELIEF

FOR IMMEDIATE RELEASE FROM

THE WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS

Tuesday, April 21, 2020

CONTACT:    

Lyn Peters, DFI Director of Communications
PH 360-902-8731, lyn.peters@dfi.wa.gov

Lucinda Fazio, Director Division of Consumer Services
PH 360-902-8793, CSDirector@dfi.wa.gov

WASHINGTON PART OF MULTI-STATE STUDENT EDUCATION LOAN SERVICER INITIATIVE TO PROVIDE BORROWERS FINANCIAL RELIEF DURING COVID-19 PANDEMIC

Washington borrowers with commercially-owned Federal Family Education Program Loans or privately held student loans who are struggling to make their payments due to the COVID-19 pandemic may be eligible for expanded relief

OLYMPIA – The Washington State Department of Financial Institutions (DFI) announced today Washington State has secured relief options with many private student loan servicers (see list below) to expand on the protections the federal government granted to federal student loan borrowers. These new options stand to benefit thousands of Washington borrowers with privately held student loans.

The federal CARES Act provided much needed relief for students with federal loans, including the suspension of monthly payments, interest, and involuntary collection activity until Sept. 30, 2020. However, the CARES Act left out millions of student loan borrowers with federal loans not owned by the U.S. Government, as well as loans made by private lenders. 

Under this new initiative, Washington borrowers with commercially-owned Federal Family Education Program Loans (FFELP) or privately held student loans who are struggling to make their payments due to the COVID-19 pandemic may be eligible for expanded relief. Borrowers in need of assistance should immediately contact their student loan servicer to learn about the options that are appropriate to their circumstances.

Relief options include:

  • Providing a minimum of 90 days of forbearance
  • Waiving late payment fees
  • Ensuring that no borrower is subject to negative credit reporting
  • Ceasing debt collection lawsuits for 90 days
  • Working with borrowers to enroll them in other borrower assistance programs, such as income-based repayment.

“At this time of immense financial hardship for so many, it was crucial for us to find a way to provide relief to more student loan borrowers who are struggling financially due to the COVID-19 pandemic,” DFI Director Charlie Clark said. “I’m pleased we were able to work with several states and servicers to accomplish this for Washington residents.”

Additionally, if regulated student loan servicers are limited in their ability to take these actions due to investor restrictions or contractual obligations, servicers should proactively work with loan holders whenever possible to relax those restrictions or obligations.  Prudent and reasonable actions taken to support relief for borrowers during the pandemic will not be subject to examiner criticism from DFI.

To determine the types of federal loans they have and who their servicers are, borrowers can visit the Department of Education’s National Student Loan Data System (NSLDS) at nslds.ed.gov or call the Department of Education’s Federal Student Aid Information Center at 1-800-433-3243 or 1-800-730-8913 (TDD). Borrowers with private student loans can check the contact information on their monthly billing statements.

If a borrower is experiencing trouble with their student loan servicer, they are encouraged to contact the following and file a complaint:

DFI’s actions to work cooperatively with other states to secure these accommodations with private student loan servicers will provide relief to thousands of Washington residents.

States joining the effort include California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, Virginia, Washington, and the District of Columbia.

Private Student Loan Servicers Providing Relief

  • Aspire Resources, Inc.
  • College Ave Student Loan Servicing, LLC
  • Earnest Operations
  • Edfinancial
  • Kentucky Higher Education Student Loan Corporation
  • Lendkey Technologies, Inc.
  • MOHELA
  • Navient
  • Nelnet
  • SoFi Lending Corp.
  • Tuition Options
  • United Guaranty Services, Inc.
  • Upstart Network, Inc.
  • Utah Higher Education Assistance Authority
  • Vermont Student Assistance Corporation

 ###

About the Division of Consumer Services ▪ www.dfi.wa.gov/cs ▪ 360-902-8703 ▪ 877-746-4334, x 8703 The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as "payday lenders." The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.

About DFI ▪ www.dfi.wa.gov ▪ 360-902-8700 ▪ 877-RINGDFI (746-4334)

The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: www.twitter.com/FinEd4All ■ www.twitter.com/DFIConsumers ■ www.finlit.blogspot.com ■ www.youtube.com/user/WADFI ■ www.homeownership.wa.gov