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Tuesday, April 21, 2020

UC Loan Payment Suspensions

University of California offers Perkins loan borrowers relief. Will other colleges follow?

Danielle Douglas-Gabriel, Washington Post, April 20, 2020 via SFGATE

The University of California, one of the most influential public higher education systems, is offering alumni student debt relief in response to the coronavirus pandemic, suspending interest and payments on $140 million in education loans it owns.

The move mirrors much of the student debt relief offered in the $2.2 trillion stimulus package but covers a type of federal loan that was excluded from the deal: Perkins loans. Those loans for low-income students are held by colleges and universities. Although the Education Department is giving schools flexibility on collecting payments amid the crisis, there is no assurance they will extend relief to borrowers.

Nearly 40,000 former students with $92 million in Perkins loans stand to benefit from UC's decision, which also applies to DREAM loans made to undocumented students.

Borrowers will automatically have the interest on their loans waived through Sept. 30, but must choose to temporarily postpone their payments. Anyone who is delinquent will have their payments automatically suspended, according to the university. UC will halt late fees and refrain from turning over accounts to debt collection agencies through the end of September.

"We're trying to level the playing field for students," Shawn Brick, director of student financial support at UC, which has undergraduate campuses in Berkeley, Los Angeles and seven other locations. "We felt it was important to make sure students with loans where UC is the lender of record have the same support" afforded to other federal borrowers through the Cares Act.

Brick said the university system was exploring ways to help alumni with UC-held loans since President Donald Trump ordered the Education Department in March to offer 60-day relief to most federal borrowers. The guidance the department provided on Perkins, he said, made it easier for the university to move forward on those loans...

Given the financial turmoil colleges are confronting because of the coronavirus outbreak, some may not be in a position to forgo money from Perkins loan repayment.


"Depending on the amount of outstanding Perkins Loans a school has, the interest could be a sizable dollar amount," said Bryan Dickson, director of student financial services at the National Association of College and University Business Officers. "That said, it is not unexpected to see colleges and universities prioritizing their desire to assist students in need . . . despite facing their own institutional budget constraints."...

Full story at https://www.sfgate.com/news/article/University-of-California-offers-Perkins-loan-15213341.php

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