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Coronavirus Update- Yahoo Finance

Coronavirus Update: New York Suspends Debt Collection for Medical, Student Loans

By Aarthi Swaminathan
Yahoo Finance

This story has been updated.

New York has suspended debt collection across the state.

New Yorkers who owe money to the state, effective immediately, will no longer have to pay their student debt, medical debt, and other forms of state-referred debt, for at least 30 days.

In other words, these outstanding debts will be “frozen,” according to a tweet by New York Governor Andrew Cuomo.

This measure was taken in response to the spread of the coronavirus, or COVID-19.

“Countless New Yorkers have been impacted — directly or indirectly — by the spread of COVID-19, forcing them to forgo income and business,” a press release from the Attorney General’s office stated. “In an effort to support these workers and families and ease their financial burdens, the OAG will halt the collection of medical and student debt owed to the State of New York …”

“We’re doing all we can to support those suffering financially due to #COVID19,” Cuomo wrote in a tweet.

More than 165,000 debts are affected by the decision, Attorney General Letitia James said on Tuesday.

“In this time of crisis, my office will not add undue stress of saddle New Yorkers with unnecessary financial burden,” she said.

This includes patients that owe medical debt to the five hospitals, and the five veterans’ homes, student debt owed by borrowers to the State University of New York, and other debtors.

The suspension also pauses accrual of interest and collection of fees on all outstanding debt.

To be clear, the suspension of debt collection helps borrowers with private or state loans, rather than those with federal loans, Natalia Abrams, executive director of Student Debt Crisis, told Yahoo Finance.

“This action by Governor Cuomo does not include debts owed to private parties or the federal government,” Shanna Tallarico, a consumer lawyer with the New York Legal Assistance Group, told Yahoo Finance.

“However, it does help people in the sense that instead of paying these state-owed debts they can use the money for to pay for their essential living expenses, which is very important for people who are losing wages and income due to this crisis.”

Originally published in Yahoo Finance on March 17, 2020

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