New York suspends state student, medical debt during coronavirus crisis

Posted at 7:36 AM, Mar 18, 2020
and last updated 2020-03-18 07:36:59-04

New York Attorney General Letitia James has temporarily suspended medical and student debt referred to her office amid the coronavirus crisis.

The collection of medical and student debt referred to the attorney general's office will be halted for at least a 30-day period, through April 15, according to a statement released by New York Gov. Andrew Cuomo and James on Tuesday. Not all student debt will be halted, just that which has been referred to the AG office for delinquency from state institutions. The attorney general collects unpaid debt to New York via settlements and lawsuits brought on behalf of the state.

"In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden," James said in a statement. "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."

The relief will apply to about 165,000 debt cases, the vast majority of which is student or medical debt.

The decision on whether to extend the suspension will be assessed during that time period.

In addition, New York will also be accepting applications for the suspension of all other types of debt owed to the state and referred for collection.

"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."

Earlier on Tuesday, Cuomo urged New Yorkers to practice "kindness" in times of chaos.

"Be a little bit more loving, a little bit more compassionate, a little bit more comforting, a little bit more cooperative," he said during a news conference. "And we will get through this time."

Treasury Secretary Steven Mnuchin said during a press conference at the White House Tuesday that that the administration is looking at sending checks directly to American households to ease the financial burden caused by the outbreak.

"What we heard from hardworking Americans, many companies are now shut down, whether bars or restaurants -- Americans need cash now and the president wants to get them cash now," he said. "I mean now in the next two weeks."

Washington state is also looking into a debt-relief program for residents, as state governments grapple with the virus' economic fallout.

Washington's program would include deferred bills, no-interest loans, debt and late-penalty forgiveness for companies and workers, and favorable credit terms for firms that encounter cash-flow programs during the crisis, according to a statement on the governor’s website.