This Week In Washington
On Thursday, the president announced that he would be preparing an executive order taking action on student loan repayment options. Recall that the president suspended student loan payments for two months via executive order in March, with the Coronavirus Aid, Relief, and Economic Security (CARES) Act codifying that action into law and extending it to six months. No details were provided about what the action would cover or when it would be ready to sign. The current payment pause is set to expire on September 30, 2020.
This announcement comes as negotiations for the next stimulus package remain stalled and a bipartisan group of attorneys general from 27 states urge Congress to expand the payment pause to commercially-held Federal Family Education Loan Program loans and institutionally-held Perkins loans, which were not included in the CARES Act.
A group of Democratic Senators wrote a letter to Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger raising concerns about potential redlining in student borrowing. Lawmakers called into question the lender practice of using education level and education data to determine creditworthiness and noted they want the CFPB to address potential underwriting practices that “create significant risk of unlawful discrimination in violation of federal fair lending laws.”
News You Can Use
Low-income households report that they are falling further behind on student loan payments because of the coronavirus pandemic, despite CARES Act relief.
The latest quarterly report on household debt and credit from the Federal Reserve Bank of New York shows that the share of federal student loans that fell into delinquency has dropped significantly because of forbearance coverage provided by the CARES Act.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
H.R. 7872 – [Rep. Glenn Grothman (R-WI-6)] would allow institutions of higher education to limit the amount of a Federal loan that a student may borrow.