Attracting much attention in the vast impacts of the CARES Act has been student loan forbearance for those holding federal or federally backed student loans. As we've discussed before, the coverage of who can get access to forbearance does not include everyone (undocumented immigrants, those with private loans), but the purpose behind it is similar to home mortgage forbearance: alleviating immediate financial strain without incurring credit losses or other problems.
Yet similarly to what I posted about mortgages, credit scores have still been taking a hit for student loan borrowers. Given how quickly credit bureaus and loan organizations were asked to change their computer programs, apparently some problems emerged that allowed scores to drop precipitously for people who went into forbearance when nothing else changed.
Student loan borrowers discover significant drop in credit score following CARES Act protections (WSB TV)
From the article: "Betsy Mayotte with the Institute of Student Loan Advisors told Gray that loan servicers had to update their computer programming in a matter of days because of the CARES Act, and that Great Lakes may not be the only company with this problem."
Unfortunately, as with almost every kind of credit reporting error, the individual must follow up to ensure that corrections are made.
Report an error in your credit score (Consumer Financial Protection Bureau)
Similarly, student loan borrowers are discovering that the Department of Education continues to garnish the wages of those who may be delinquent on payments - prohibited in the CARES Act.
54,000 People Had Their Paychecks Seized To Pay Student Loans, Despite Pause (Forbes)
According to the Department of Ed, some employers had not updated paperwork or processes to stop the garnishments, some addresses were incorrect and therefore unable to have garnishment paused, or other issues - even nearly two months later.
From the article: " If your wages or other benefits were illegally garnished, contact the Education Department’s Default Resolution Group to obtain a refund at 1-800-621-3115 (TTY for the deaf or hearing-impaired 1-877-825-9923)."
The CARES Act blog is intended to provide information and is accurate and true to the best of the author's knowledge. The author is not a legal, medical or financial professional and the information presented should not be considered advice and is for reference only. Lehigh Valley Public Media and its employees claim no liability for any actions taken by readers based on the information provided here.