On Sept. 28, 2018, President Donald Trump signed into law a bill allowing people with cancer to put their student loan payments on hold. The rollout of the new program has been rocky.
The Education Department, in a notice in the Federal Register, writes: "The law was immediately effective, meaning that borrowers can immediately request and, if eligible, should receive the deferment."
That's not happening. Cancer patients with student debt hoping to get this new break from their monthly bills are running into a wall.
At issue seems to be this: The Education Department hasn't provided the companies that administer its federal student loan programs with an official application for borrowers to apply for the deferment, even though the law has been in effect for more than six months now.
"From talking to a couple of loan servicers about this, they have been frustrated by the lack of direction that they've gotten from the Department of Education," said Colleen Campbell, associate director of postsecondary education at the Center for American Progress.
The Education Department is taking steps to create and issue an application for the deferment. Still, the delay is frustrating to sick borrowers like Peter Tanner, who was diagnosed with stage 4 bowel cancer last year and owes more than $15,000.
Up to 1 million borrowers could be eligible for the new deferment, according to estimates by Mark Kantrowitz, an expert on student debt. The requirements are: 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.
"It sounds like Congress wanted to do a good thing – and I feel like I'm not even getting half of what they intended in the law," Tanner, 40, said.
Throughout the last year, Tanner has spent weeks in the hospital, had three abdominal surgeries and lost more than 70 pounds.
He said he was grateful and relieved to learn that Congress was offering a reprieve for borrowers with cancer. His medical costs have already forced him to take out a home equity loan on his house and lean on his credit cards.
Tanner called Mohela, his student loan servicer, in February. He was put on hold multiple times, he said, and then was delivered the bad news: "The bottom line they gave me was, 'We don't have an official application from the U.S. government,'" Tanner said. "'Until we get that, we can't enroll you in this program.'"
In the meantime, he said he was told the servicer would put his loans into a temporary forbearance, during which his payments would be paused but interest would continue to collect on his debt. (Under the new cancer deferment, interest is suspended.)
"They were very clear, 'The interest will continue,'" he said, "They weren't going to do anything in line of trying to get me into a full deferment via the program."
A spokesperson for Mohela said that implementing a new deferment is complicated and that this timeline was not unusual. He said the form would be released soon and eligible borrowers would have any interest that accumulated on their loans waived.
The bumps in the road are due to the fact that the law was effective at time of enactment, said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade association that represents student loan servicers.
"When Congress makes changes, historically they have provided a window of time for implementation," Buchanan said. "That was not the case with the cancer deferment, which poses real challenges."
Yet there was likely a reason the provision didn't come with a lag time, Kantrowitz said, "Cancer patients can't wait."
At the end of January, the Education Department asked the Office of Management and Budget to conduct an emergency review and approval of its cancer deferment application.
However, the law had been in effect for four months by then.
The Education Department also required a 60-day comment period on the form, a seemingly longer timeline than necessary, Kantrowitz said. (Only three people have commented.)
"The department could have required only a 30-day comment period, or even a 15-day comment period," Kantrowitz said.
It might be unreasonable to expect the new program to be smoothly rolled out the day after the law passed, said Barmak Nassirian, director of federal relations at the American Association of State Colleges and Universities. However, he said, "it could have been expedited if the department had resources and sufficient focus on it."
Liz Hill, press secretary at the Education Department, said the agency has established an interim process that allows borrowers to stop making payments on their loans as it works to implement the law passed by Congress. She also asked for borrowers running into issues to contact them at StudentAid.gov/feedback.
"The department is committed to supporting students who are undergoing cancer treatments and are struggling to repay their student loans," Hill said.
However, the complications have already caused Julie Roberts, who owes $80,000 in student debt and has stage 4 breast cancer, to all but give up on the new cancer deferment.
When she called her servicer, American Education Services, the staff didn't even seem to understand the program.
Over multiple phone conversations with the company this year, she said employees told her that the bill had not yet passed and that she didn't qualify for it — both of which are not true.
CNBC asked Keith New, director of media relations at American Education Services, why Roberts was being denied the deferment. New identified her account and said there had been a communications 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."
Since the servicer doesn't yet have an official application from the Education Department, it put Roberts' loans on pause and New said it will eventually cancel any interest that accrued once it has that form.
Roberts said she hopes to follow up when the paperwork is available, but worries she won't have the energy to do so. She had a mastectomy this week and is scheduled for more surgeries and rounds of radiation.
"I'm just too tired to get on the phone and pursue five people before someone even knows what I'm talking about," she said.
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