Personal Finance

Julie Roberts recently learned that people with student debt can postpone their payments, with no penalties, if they’re diagnosed with cancer.

She was interested — the 52-year-old woman owes around $80,000 and is fighting stage 4 breast cancer.

The requirements of the cancer deferment, passed by Congress last year, are straightforward: a person needs to owe money on federal student loans and be in active treatment for cancer. Once approved, borrowers can pause their bills throughout their medical care and then for six months afterward.

Shortly after she learned about the option, Roberts called her student loan servicer, American Education Services, to request that her payments be put on hold.

To her surprise, she said she was given a variety of reasons for why the lender didn’t need to offer her the deferment. She said she was told the bill had not yet passed and that she didn’t qualify. These conversations took place in early January, she said.

Only after a CNBC reporter contacted American Education Services was Roberts granted the deferment. Despite the good news, Roberts was left with a question: “What would have happened had I not reached out to [a] CNBC reporter?'”

Her ordeal raises questions about how other student loan servicers are handling the new program. “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.

Between 400,000 and 1 million borrowers could be eligible for the deferment, according to estimations by Mark Kantrowitz, an expert on student debt.

After multiple rounds of chemotherapy, Roberts had to abandon her private practice as a pediatric speech- language pathologist. “On some days I can’t walk from my bed to the bathroom,” she said.

And her medical expenses have squeezed her financially.

“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?” (She is currently enrolled in an income-driven repayment plan with monthly payments of $0, but interest is piling up on her debt).

Despite what American Education Services told her, Roberts didn’t give up.

“I’m entitled to it,” she said. “Legislators passed it and it’s supposed to help people like me.”

She obtained a letter from her cancer doctor in Houston, confirming that she’s in active chemotherapy treatment and will soon have surgery. However, she said American Education Services wouldn’t provide her a way to send the letter to them.

She filed complaints with the Consumer Financial Protection Bureau and her congresswoman, Sheila Jackson Lee, D-Texas. Then she sent an email to CNBC.

CNBC had two student loan experts review Roberts’ documents: Kantrowitz and Betsy Mayotte, the president of the The Institute of Student Loan Advisors.

Both confirmed that Roberts appears to qualify for the provision.

“Without a doubt, she is eligible,” Kantrowitz said. He went on, “As a 15-year cancer survivor, I am outraged that a stage 4 cancer patient would be given the runaround, without any compassion.”

The cancer deferment option has been in effect since Sept. 28, 2018, and any eligible borrower who requests the accommodation from that date on should be granted it, Kantrowitz said.

CNBC then asked American Education Services why Roberts was being denied.

Keith New, the director of media relations at the company, identified her account and said there had been a communication error.

“She is eligible for the new cancer treatment deferment,” New wrote in an email. “We have taken corrective action to ensure that this error remains an isolated case.”

Indeed, shortly after that correspondence, Roberts received a call from someone at AES. She was told that her loans would be put into deferment without interest accruing.

Roberts said she hopes the process is easier for other sick borrowers.

“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.”

How to access the cancer deferment:

Many of the details of the program still need to be ironed out, said Elaine Griffin Rubin, senior contributor and communications specialist at Edvisors, a financial aid site.

In the meantime, contact your federal loan servicer for information about the deferment, Griffin Rubin said.

“Because there is a medical component to it,” she said, “it will likely need some sort of certification from a medical doctor.”

The U.S. Department of Education says to check back with their website periodically for more details.

“Research your rights and the law before calling the lender,” Kantrowitz said. “It will be harder for them to confuse you if you can cite chapter and verse of the law and regulations.”

If that’s not working, on Kantrowitz’s website, you can find tips on how to complain about your servicer.

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