VIRUS ACT FREEZES STUDENT LOAN PAYMENTS
May 28, 2020 - Douglas Myser
Virus act freezes student loan payments. One of the less discussed benefits in the CARES Act is assistance for those with federal student loans. But unlike other programs in the stimulus legislation, no application is required. The law doesn't cancel student debt, but it does freeze payments--and their interest--for everyone who has a federally held loan. Most borrowers won't have to worry about making any loan payments until October--for now. A number of lawmakers don't think the law goes far enough. The HEROES Act--a $3 trillion fourth congressional stimulus package--passed by the House of Representatives., would forgive up to $10,000 of both federal and private loans for borrowers meeting the criteria to be deemed economically distressed." The provision (which like the rest of the HEROES Act was crafted by House Democrats) is unlikely to make it into the final text of any future relief bill that gets passed by Congress. Virus act freezes student loan payments.
Nevertheless, Senate Democrats are also pushing some kind of loan forgiveness in the next bill--their proposal is similar to that of the HEROES Act: The federal government would pay at least $10,000 toward every borrower's federal student loan balance. Other lawmakers have advocated for loan relief for essential workers, while some progressive advocacy groups, like Young Democrats, have called for more sweeping relief akin some of the debt cancellation proposals put forward during the Democratic primary. Some former Democratic presidential candidates have endorsed using the pandemic to enact sweeping changes to student debt policy.
Shortly after the passage of the CARES Act, former candidate Sen. Elizabeth Warren---who proposed forgiving up to $50,000 of debt for federal loan borrowers during the primary--tweeted, "Student loan debt cancellation MUST be a part of the next emergency coronavirus package." Presumptive Democratic nominee Joe Biden has released a modified version of the progressive plans championed by Warren and Sen. Bernie Sanders, his plan would cancel the tuition related undergraduate debt of borrowers earning less than $125,000 per year.
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