Newsom Announces Expansion of Student Loan Relief
KQED - April 23, 2020


California Gov. Gavin Newsom announced Thursday that he had negotiated an agreement with 21 student loan servicers to offer a 90-day forbearance in student loan debt, impacting 1.1 million Californians.

Effective immediately, those loan debt payments will be put on pause with no impact to a borrower’s credit rating, no late fees or fines. Companies will also offer support to get new payment plans in place as needed, said Gov. Newsom. He credited Illinois Gov. J.B. Pritzker with piloting a framework for California’s action. Pritzker announced a similar measure earlier this week.

Gov. Newsom also announced that he had signed an executive order barring debt collectors from garnishing coronavirus relief payments for Californians under the federal CARES Act. Under the terms of the legislation, stimulus payments could in principle be vulnerable to that kind of action from creditors.

“Now is not the time to garnish those emergency contribution checks,” said Newsom. The executive order is also retroactive, so “if you are a debt collector who garnished those checks, you’ve got to give them back,” he added.

The debt collection rule does not apply to Californians who are behind on child or spousal support payments.

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