There is a piece of good news coming out of Washington for those of us who have student debt, and are then hit with the double whammy of a cancer diagnosis. Yes, government is doing something helpful!
As the population of people who owe the Department of Education ages, the number of people faced with cancer bills on top of student loan payments is also increasing. A new provision included in a congressional spending package aims to alleviate some of that financial burden.
Borrowers facing cancer can now pause their payments for the duration of their treatment, and for six months afterwards, with no interest building up. This will spell relief for a significant group; considering more than 70,000 people between the ages of 15 and 39 are diagnosed with cancer in the U.S. every year.
This specific age group tends to have some different concerns than others facing cancer. Critical Mass: The Young Adult Cancer Alliance notes that before this provision was passed, some people racked up an extra $45,000 in student debt during their treatment due to accruing interest. Given the price of cancer drugs, even for people who have insurance, stacking medical bills on top of student loan bills can be financially catastrophic.
Crystal Hogg, who was diagnosed with stage 2 throat cancer when she was 28, told SurvivorNet that the financial ruin caused by medical bills and student loans completely threw her life off track. Her diagnosis came shortly after she finished her Master’s degree at Belmont University in Nashville. “I had undergone surgery, rounds of radiation, and chemo treatments that would last for up to two years after the original diagnosis,” Hogg said. “I missed a lot of work, took a lower paying job, and did not continue on to get a Ph.D. over it. It also left me trying to dig out of debt for ten years after the fact, due to a combination of student loans, life expenses and medical costs.”
Hogg said that the interest on her student loans is what really caused issues for her. She explained that her debt from undergraduate and graduate school, which was originally around $50,000, ballooned to around $130,000 because of interest that was piling up while she was treated for cancer.
“I never deferred the loans, and even managed to get one of the smaller loans that was not consolidated paid off,” Hogg said. However, loans that Hogg did consolidate, because she was told that she should in order to qualify for a forgiveness plan, continued to gain interest throughout the years.
“No matter how much I pay over the monthly payment, they calculate future interest to the loan. I can never get ahead on it,” Hogg said.
Hopefully, the provision will provide some relief for people like Hogg, who are burdened with huge amounts of debt simply because they were faced with a medical emergency while they still owed the Department of Education. Though Elaine Griffin Rubin, a senior contributor and communications specialist at financial aid site Edvisors, told CNBC that many of the details need to be worked out before people with cancer can really start benefitting from the new law. The Department of Education’s website currently says that it is assessing the newly enacted law and will explain the new deferment conditions to Americans hoping to make use of them “as soon as more details are available.”
People hoping to take advantage of the student loan provision should contact their federal loan servicer.