Finally, Cancer Patients Can Now Defer Payback on Student Loans

Roxanne Nelson, RN, BSN

August 27, 2019

UPDATED with comments August 28, 2019 // Late last year, an amendment to an appropriations bill was passed that would allow cancer patients to defer payment on their student loans while they underwent treatment.

After an 11-month delay, the US Department of Education has finally released a form that borrowers can use to apply for a deferment.

The amendment was signed into law on September 18, 2018. It allows cancer patients to postpone their student loan payments throughout their treatment for cancer and for 6 months afterward. No interest will accrue during this period.

"Cancer patients should not have to worry about their student loan payments while fighting for their lives," then-representative Ileana Ros-Lehtinen (R-FL), commented at the time.

The amendment was modeled after the Deferment for Active Cancer Treatment Act of 2017 (HR 2796), which had been introduced by Ros-Lehtinen and Ed Perlmutter (D-CO).

The new law is part of the 2019 Department of Defense and Labor, Health and Human Services, and Education Appropriations Act.

The bill was supposed to go into effect immediately upon being signed into law.

Instead, the rollout was delayed, causing frustration for many cancer patients, who found themselves up against a stone wall without a deferment. The Department of Education failed to provide the companies administering the federal student loan programs with a form that cancer patients could use to apply for the postponement.

As a result, the federal government prevented cancer patients from enrolling in the program. The newly released form now corrects the problem.

The release of the much needed application forms has been applauded by advocacy groups. "This is a significant change for young adults diagnosed with breast cancer because they are often less established in their careers and finances than their older counterparts and more likely to have substantial student loan debt," said Jamie Larson, associate director of marketing and communications at the Young Survival Coalition, an organization dedicated to the needs of young adult patients with breast cancer. "Providing them economic relief in one of the most difficult moments in their lives is progress."

Eligibility Criteria

According to an article in the Washington Post, the new deferment is more flexible than other options in that it requires that no interest be charged on a wider range of federal loans during the postponement period. There is also no time limit — if cancer recurs 5 years down the road, the borrower would be eligible to seek another deferment. In contrast, other options have 3-year limits.

This benefit, however, applies only to federal loans that were made on or after September 28, 2018, when the measure became law, and to loans that were being repaid on that date. The Department of Education estimates that more than 5000 federal student-loan borrowers may be able to benefit from this law.

To qualify, patients must submit a letter from a physician that certifies that they are or were receiving treatment for cancer, as well as the dates of care. Postponement of payment will be approved for up to 1 year during treatment and for 6 months after treatment. The patient's provider can submit a new letter if the treatment and posttreatment periods exceed this time frame.

Some Criticism

However, reader comments in reaction to the Washington Post article show that many see this measure as merely a Band-Aid in a broken healthcare and educational system.

One reader wrote, "Deferred, not forgiven," and "America is #1 in terms of personal medical and educational debts."

Another reader noted that this new law was a "small mercy" but that it would be "better still to not have to worry about losing every single thing you've worked for in your life simply for getting sick."

A third reader questioned why this deferment was not extended to all people struggling with a life-threatening disease. "A suspension of student debt in the event of major illness is just humane. But why is this limited to cancer? Sounds like they're going for a feel good story vs helping people who are dealing with debt and significant medical crises in general."

Impassioned Plea

Financial toxicity is a well known "side effect" of cancer, in that many patients struggle to pay their related medical bills. Even patients with health insurance are affected, because out-of-pocket expenses can be much higher than anticipated. The burden of healthcare costs can be more acute in young adult cancer patients, who may be less established in their careers and have less savings or earnings than older patients. They may also have student loans to repay.

The case for deferring student loan repayments while undergoing cancer treatment was argued passionately in an op-ed article published in 2017 in the New York Times. The author, Rebecca Ritzel, was working as an adjunct professor at the University of Maryland and as a freelance writer when she was diagnosed with an aggressive form of ovarian cancer at age 36. She was shocked to learn that her student loan servicer would not allow her to defer payments without penalty.

"I had cancer," she wrote. "I was about to lose more than half my income for who knew how long. All I could do was put my loans into forbearance, causing them to accrue additional interest."

She wrote that her cancer diagnosis meant that "my master's degree from Syracuse University was going to cost far more than the $50,000 I was already on pace to pay for it."

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