New York Suspends Collection Of Medical, Student Debt

With the US – and global – economy now officially in recession as even Goldman capitulates, as tens of thousands of New Yorkers suddenly find they are unable to log into the state’s unemployment benefits website, as Elizabeth Warren renews her call for an unprecedented student debt jubilee, and as millions of Americans working from home await with quiet desperation as their pink slips arrive in the mail as their employers have no choice but to downsize, in some cases to zero, moments ago gov Andrew Cuomo announced New York would halt the collection of debt owed to the state for one month, from March 16 to April 15.

“The temporary policy will also automatically suspend the accrual of interest and collection of fees on all outstanding state medical and student debt referred to the OAG for collection, so New Yorkers are not penalized for taking advantage of this program.”

In a statement, the Attorney General’s office said it will reassess the needs of state residents after 30 day for a possible extension

Separately, New Yorkers with non-medical or non-student debt can also apply for a temporarily halt of state debt collection.

Full statement below:

Governor Cuomo and Attorney General James Temporarily Suspend State Debt Collection in Response to Coronavirus

New Yorkers with Student, Medical, and Other State-Referred Debt Will Have Payments Frozen for At Least 30 Days

Governor Andrew M. Cuomo and Attorney General Letitia James today announced that — effective immediately — the state will temporarily halt the collection of medical and student debt owed to the State of New York and referred to the Office of the Attorney General for collection, for at least a 30-day period, in response to growing financial impairments resulting from the spread of 2019 novel coronavirus, or COVID-19. Countless New Yorkers have been impacted — directly or indirectly — by the spread of COVID-19, forcing them to forgo income and business. In an effort to support these workers and families and ease their financial burdens, the OAG will halt the collection of medical and student debt owed to the State of New York and referred to the OAG for collection from March 16, 2020 through April 15, 2020. After this 30-day period, the OAG will reassess the needs of state residents for a possible extension. Additionally, the OAG will accept applications for suspension of all other types of debt owed to the State of New York and referred to the OAG 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,” Governor 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.” 

“In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden,” said Attorney General 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 OAG collects certain debts owed to the State of New York via settlements and lawsuits brought on behalf of the State of New York and state agencies. A total of more than 165,000 matters currently fit the criteria for a suspension of state debt collection, including, but not limited to:

• Patients that owe medical debt due to the five state hospitals and the five state veterans’ home;
• Students that owe student debt due to State University of New York campuses; and
• Individual debtors, sole-proprietors, small business owners, and certain homeowners that 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.

The temporary policy will also automatically suspend the accrual of interest and collection of fees on all outstanding state medical and student debt referred to the OAG for collection, so New Yorkers are not penalized for taking advantage of this program.

New Yorkers with non-medical or non-student debt owed to the State of New York and referred to the OAG, may also apply to temporarily halt the collection of state debt. Individuals seeking to apply for this temporary relief can fill out an application online or visit the OAG’s coronavirus website to learn more about the suspension of payments. If an individual is unable to fill out the online form, they can also call the OAG hotline at 1-800-771-7755 to learn more.