This Week In Washington
On Thursday, the Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion emergency stimulus package. If signed into law, the bill would provide relief to federal student loan borrowers by suspending payments on all federally held student loans (during which time interest will not accrue) and suspending the collection and offset of defaulted federal student loans for a period of 6 months. Additionally, the suspended payments would count as qualifying payments for borrowers on track for Public Service Loan Forgiveness (PSLF) and income-driven repayment plans, count as payments towards loan rehabilitation, and be treated as regular payments by credit reporting agencies. The bill is now being considered by the House where it is expected to pass.
On Tuesday, the Education Department (ED) announced that it will be suspending all collection activities related to defaulted federal student loans for at least 60 days retroactive to March 13. This includes garnishing borrowers’ wages, tax refunds and Social Security checks. ED also announced that it will be refunding federal student loan borrowers whose tax refunds or Social Security benefits were seized in recent weeks. Additionally, the President directed ED to allow student borrowers to waive making payments on their loan obligations for at least the next two months. This all comes as the administration looks for ways to ease financial burdens caused by the growing COVID-19 economic fallout.
News You Can Use
What the new coronavirus recovery bill does and doesn’t do for student loan borrowers.
Higher education leaders are already looking toward the next stimulus proposal.
Adam Looney of the Brookings Institution cautions that a student loan tax-break in the latest COVID-19 relief package may only benefit higher-income borrowers.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S.Amdt. 1578 to H.R. 748 – Coronavirus Aid, Relief, and Economic Security (CARES) Act [Mitch McConnell (R-KY)] – a $2 trillion emergency appropriations supplemental to aid the COVID-19 outbreak response and recovery effort.
S. 3556 – COVID-19 Graduate Relief Act [Sen. Mitt Romney (R-UT)] would let students graduating this year defer their federal loans for up to three years. The bill would also grant the Secretary of Education authority to extend eligibility to 2021 and 2022 graduates should the economic fallout from the coronavirus outbreak warrant such an action.
H.R. 6316 – Emergency Assistance for Student Borrowers Act [Rep. Madeleine Dean (D-PA-4)] would provide relief to Federal and private student loan borrowers during the COVID-19 outbreak. This includes freezing student loan payment requirements, a six-month grace period on interest accrual and loan repayment immediately following the declared national emergency, and up to $10,000 in public and private student loan relief.