Know Your Rights: COVID-19 Frequently Asked Questions for DC Residents

General intake line: (202) 274-7386

• Will you go to jail for not paying a debt?

• What are your student loan protections during COVID-19?

You cannot go to jail for not paying a debt.

Attend your court hearings to avoid arrest or seek help to avoid problems.

However, if you receive a notice telling you to attend a court hearing, it is important for you to attend that hearing according to the notice or get legal help, since ignoring such a notice could result in your arrest. For example, some DC Creditors have attempted to have defendants in debt collection cases arrested for not attending hearings after a judgment has been issued.

Similarly, if you do not comply with a direct order from the court to do something, the court can hold you in contempt, which could result in your arrest. If you have received a court notice or court order and are not able to comply with it or have questions, you should consider contacting Tzedek DC or another legal services organization for help immediately.

Federal Protections

The United States Congress passed the CARES Act, which provided relief for federal student loan borrowers during a limited period of time, March 13, 2020, through September 30, 2020. The Department of Education has extended that relief a number of times. Following the latest announcement of challenges to the Biden Administration’s plan to cancel up to $20,000 of federal student loans for borrowers, the Department of Education announced that it would extend some of that relief through June 30, 2023.

The United States Department of Education has automatically placed all federal student loan borrowers on an administrative forbearance from March 13, 2020, through June 30, 2023. That means borrowers do not have to make payments and the interest on these loans is 0%. You may opt out of the administrative forbearance, and you may make payments to your loans during the forbearance. If you make payment on your loans during this period your payments will first be credited towards any interest and fees due before this period, then will be credited toward your principal balance. During this time, unless your loans are in default, servicers will provide information to credit bureaus as though borrowers made their scheduled payments. If your loans were in default before the administrative forbearance, and you have not brought them current, your loans will continue to be reported to consumer reporting agencies as in default.

If you were already enrolled in an Income Driven Repayment (IDR) plan or the Public Student Loan Forgiveness program (PSLF), suspended payments during this period will count toward PSLF and IDR plans.

Federal Student Loans Defaulted Before March 13, 2020

For those who have defaulted on their federal student loans, the United States Department of Education has paused collection actions, wage garnishments (taking money out of your paycheck or other payment by a third person), and offsets (money that comes out of tax refunds and Social Security payments, for example) from March 13, 2020, through December 31, 2022. You may try to get a refund if your wages have been garnished or offset during that time. If your Social Security payments or tax refunds are offset between March 13, 2020, and December 31, 2022, call the United States Department of Education's Default Resolution Group at 1-800-621-3115 (TTY for the deaf or hearing-impaired 1-877-825-9923).

The Department of Education also announced the Fresh Start program in April 2022. The Department of Education will mark defaulted loans as current if borrowers take certain steps, including making a long-term payment arrangement. This program applies to Direct Loans, Defaulted FFEL loans, and Defaulted Perkins Loans held by the Department of Education. Any eligible borrower can make payment arrangements during the initiative by visiting myeddebt.ed.gov, contacting their loan holder by phone or in writing, or calling the Default Resolution Group at 1 (800) 621-3115.

Income Driven Repayment Plans

If your federal student loan is not in default and you want to explore a lower monthly minimum payment, you might consider enrolling in an income-driven repayment plan. For more information about those options and how to apply, you can click here and here. These plans all end in loan forgiveness if after the term of the repayment plan you still have a loan balance, and for low to moderate income borrowers these plans usually provide the lowest monthly minimum payment obligation. However, the amount forgiven under such a plan will be count as taxable income to the borrower, unlike under the Public Service Loan Forgiveness program.

Beware of Scams

You do not have to pay anything to benefit from the CARES Act or Department of Education discretionary relief through December 31, 2022. Anyone who contacts you asking you to pay a fee to stop your federal student loan payments during this period is scamming you. You should report these scams to the Federal Trade Commission here. Your loan servicer may offer you a rehabilitation agreement during this period if your loans are in default which would require some payments to complete. You can verify that it is your loan servicer contacting you by calling your servicer back using the Department of Education’s contact information on their website.

For more information about federal student loan protections, you can visit the Department of Education’s Frequently Asked Questions, or the Consumer Financial Protection Bureau’s website.

DC Protections

For residents with commercially-owned Federal Family Education Loan Program loans or privately-held student loans, you may qualify for 90 days of forbearance (or not having to make payments, although interest might continue to build up), a waiver of late payment fees, no negative credit reporting, a prohibition on debt collection lawsuits for 90 days, and help enrolling in borrower assistance programs. For more information, click here.

Private or Commercially-Owned Loans

If you have a privately-held student loan, other payment options may still be available if you contact your servicer.

For Free Legal Help

Contact Tzedek DC to complete an intake for help if:

• Your loans are in default and you want help to bring them current.

• Your wages were being garnished before March 13, 2020, and you want to permanently end that garnishment.

• Your Social Security or other federal cash benefits were being attached, or your tax refund was being intercepted, and you want to end that attachment.

• Your minimum student loan payments are too high, and you want to explore an Income Driven Repayment plan.

• You are permanently disabled, and you want to explore discharge of your federal student loans.

• Your school closed while you were attending, or immediately after you stopped attending, and you want to explore discharge of your federal student loans.

General intake line: (202) 274-7386

Disclaimer: This is not legal advice. This legal information is provided by Tzedek DC. You should speak with an attorney to receive specific legal advice about your matter.