Student loan borrowers impacted by the devastating wildfires in the Los Angeles area, a federally declared natural disaster, may qualify for temporary relief. The fires, which have destroyed entire neighborhoods and displaced thousands, continue to impact over 88,000 individuals who remain under evacuation orders.
Options for federal student loan borrowers
If you live or work in an area affected by the fires, federal student loan borrowers can request a natural disaster forbearance. This allows payments to be paused or reduced for up to 90 days. Kate Wood, a lending expert at NerdWallet, explains, “To say this is a difficult time for those affected is a massive understatement, and how your student loans will get paid is likely a low priority.”
Here are the key steps to take:
1. Contact Your Loan Servicer: Reach out to your federal loan servicer to inquire about relief options. If you are unsure who your servicer is, you can find this information on studentaid.gov.
2. Eligibility and Address Requirements: Your address must be within a disaster-area ZIP code to qualify. If you’ve evacuated, do not change your address with your servicer or on studentaid.gov to maintain eligibility.
3. Interest Accrual: While payments may be paused, interest will continue to accrue on unsubsidized loans during the forbearance period. You will need to pay this interest once the forbearance ends.
Federal loan servicers should notify borrowers in impacted ZIP codes via email with details about how to opt in for forbearance. If you haven’t received communication, you can call your servicer directly or check their website for guidance.
For borrowers already in deferment or forbearance, no changes will occur unless you request to switch to a natural disaster forbearance. If you’re enrolled in the SAVE plan, no action is needed, as the SAVE administrative forbearance already prevents interest from accruing.
Read more: Choosing a student loan: learn what kind of loans there are and what might be best for you
Relief for private student loan borrowers
Borrowers with privately held student loans should contact their lenders directly to discuss relief options. Most private lenders offer at least a 30-day forbearance in such circumstances. While the terms may differ from federal loans, reaching out to your lender is crucial to explore what support is available.
Extending the forbearance period
Once the initial 90-day forbearance period ends, borrowers can request additional time. Extensions are granted in 30-day increments, with a maximum forbearance period of 12 monthly billing cycles from the date of the declared disaster. This flexibility ensures borrowers have time to recover from the immediate aftermath of the disaster.
Read more: Warning for student loan borrowers who fall behind on their bills – take action now
In summary, if you are a student loan borrower affected by the Los Angeles-area wildfires, relief options are available. Act promptly to contact your loan servicer or lender, and stay informed about eligibility requirements and the potential impact on interest. During this challenging time, these measures provide much-needed breathing room for those navigating the disaster’s aftermath.
