New York announces it will temporarily stop collecting medical and student debts

New Yorkers who owe money to the state for student or medical debt don’t have to worry about making their payments for the moment. On Tuesday, Gov. Andrew Cuomo and New York Attorney General Letitia James declared that the state would not be collecting on either debt, in order to prevent people from suffering an undue financial burden during the coronavirus crisis.

“Effective immediately, I'm temporarily halting the collection of state medical and student debt owed to [New York State] that was referred to my office,” James said in a tweet. “In this time of crisis, I won't add undue stress or saddle [New Yorkers] with unnecessary financial burden.” In a further tweet, James provided a link for New Yorkers with “non-medical or non-student debt owed to the State of New York and referred to my office” to apply for collection to be halted.

In a tweet, Cuomo expanded on the timeframe for the collection freeze, making clear that New Yorkers “with student debt, medical debt, and other state-referred debt will have payments frozen for at least 30 days.”

"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 added in a statement. "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."

This freeze is in effect as of Tuesday and will impact 165,000 individual debts. In 30 days, the New York Office of the Attorney General will reassess the situation and determine whether the freeze needs to be extended.

The spreading coronavirus pandemic has riled the U.S. economy, with businesses shutting down across the travel and hospitality sectors, creating massive financial hardship for those employees as well as gig and freelance workers. People have lost jobs and had their retirement portfolios devastated, and rent is looming in just two weeks. Preventing people from falling behind on their debt payments and losing homes and cars could be the key to preventing even worse financial destruction long term.

In a statement, James expanded on the motivations behind the payment freeze. “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.”