This Week In Washington
A lot of potential changes to student loans and repayment are being discussed this week in response to the COVID-19 pandemic:
On Thursday, Senate Republicans released their bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other things, the bill would suspend student loan payments on Direct Loans for three months with no interest accrual. Additionally, each of the three months would count as a payment toward Public Service Loan Forgiveness. The bill would also give the U.S. Department of Education (ED) the authority to waive certain higher education requirements.
Also on Thursday, Senate Democrats released a proposal asking for ED to provide relief to federal student loan borrowers. During the COVID-19 national emergency, the proposal would cancel monthly federal student loan payments, provide borrowers with a minimum of $10,000 of debt relief, stop all interest capitalization on federal loans, and pause debt collection activities like garnishments of wages, tax refunds and Social Security benefits. Senate Democrats hope to have this proposal included as part of a larger stimulus package addressing the economic fallout of the COVID-19 pandemic.
At a news conference late last week, the President announced that he would be waiving all interest on student loans held by all federal government agencies, until further notice. No official action has been taken on this announcement, but an ED spokesperson said that the waived interest would:
- Apply to all federal student loans;
- Be automatic for borrowers with no need to opt in or apply for forbearance; and
- Be retroactive to Friday, March 13 with no end date set.
The Office of Federal Student Aid established a Coronavirus Information webpage for students and borrowers.
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The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
H.R. 6230 – [Rep. Brendan Boyle (D-PA-2)] this legislation would amend the Public Service Loan Forgiveness Program to require a web-based portal.
H.R. 6275 – Supporting Students in Response to Coronavirus Act [Rep. Bobby Scott (D-VA-14)] would provide $3 billion in funding for schools and students to help remedy the negative impact caused by the coronavirus pandemic. This includes $1.2 billion in emergency financial aid to students in higher education and easing certain rules on aid eligibility and loan obligation for student borrowers.