New York state halts debt collection for student loans and medical payments for ‘at least’ 30 days

Photo via Flickr/Governor Andrew Cuomo

The state announced that it would temporarily halt debt collections on individuals who owe payments on student loans and medical bills to New York state, in an effort to aid the financial hardships as a result of the coronavirus pandemic.

According to Governor Andrew Cuomo and Attorney General Letitia James, the suspension on payments would be “effective immediately” for “at least a 30-day period” from March 16 to April 15. Following that period, the state will reassess the needs of residents and issue possible extensions.

“As the financial impact of this emerging crisis grows, we are doing everything we can to support the thousands of New Yorkers that are suffering due to disruptions caused by the COVID-19 pandemic,” Cuomo said. “This new action to temporarily suspend the collection of debt owed to the state will help mitigate the adverse financial impact of the outbreak on individuals, families, communities and businesses in New York state, as we continue to do everything we can to slow the spread of the virus.”

Currently, the attorney general’s office identifies more than “165,000 matters” that fit the criteria for a suspension of state debt. These cases include, but are not limited to, the following:

  • Those who owe medical debt to the five state hospitals and five state veterans’ homes;
  • Students who owe debts to State University of New York campuses;
  • Individual debtors, sole proprietors, small business owners and certain homeowners who owe debt relating to oil spill cleanup and removal costs, property damage and breach of contract, as well as other fees owed to state agencies.

In addition to suspending debt payments, the temporary policy will also automatically suspend interest accrual and collection of fees on all outstanding state medical and student debt on individuals referred to the office of the attorney general (OAG).

“In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden,” said James, “New Yorkers need to focus on keeping themselves safe and healthy from the coronavirus, and therefore can rest assured that state medical and student debt referred to my office will not be collected against them for at least 30 days. This is the time when New Yorkers need to rally around each other and pick each other up, which is why I am committed to doing everything in my power to support our state’s residents.”

The state also encourages those with non-medical or non-student debt who have been referred to the OAG to apply to temporarily halt the collection of state debt. Those who are interested can fill out an online application or visit the OAG’s coronavirus website to learn more.

Individuals unable to fill out an online application can call the OAG hotline at 800-771-7755 to learn more.