Federally held student loan payments have officially been suspended until at least 2021 due to the coronavirus pandemic. The payments on these loans were suspended by the CARES Act back in March, but this measure was set to expire at the end of September. Now, as the negotiation for other forms of financial relief drags on, this at least has been passed under President Donald Trump's executive order.
U.S. Secretary of Education Betsy DeVos implemented a memorandum from Trump to extend the relief on federally held student loans, according to a report by Forbes. This means that borrowers do not need to make payments on these loans, and no interest will accrue during this time. Additionally, the amount due — $0 — will be counted as paid, which means these months will still count towards the Public Service Loan Forgiveness Program, if applicable. Collections on defaulted loans have been halted as well, and will stay that way under these new rules.
The extension of this student loan debt relief comes from Trump's executive order issued on Aug. 8, in an attempt to push some economic relief measures through while the U.S. Congress continues to battle it out over the new stimulus check bill. The lawmakers in the United States Senate and the House of Representatives have not been able to reach an agreement on the stimulus package, and millions of Americans are desperate for any aid they can get.
Trump's order directed DeVos to "provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020." This was one of the relief measures Trump managed to push through without Congressional approval, though parts of his order remain controversial.
For example, Trump's order also created the lost wages assistance program, which states can now apply for to add $300 to each person's unemployment check. However, this program draws on funds that FEMA typically uses for disaster relief efforts, taking up to $44 billion and leaving just $25 billion behind. With a tempestuous hurricane season raging on, some questioned the wisdom of this move.
Meanwhile, Americans are becoming more and more outspoken in their demands that lawmakers return to the negotiation table and hammer out a deal for a stimulus package no matter what. The two legislatures are led by opposing political parties with conflicting goals, though they are at least agreed on the stimulus check itself. When it comes to unemployment enhancements, liability protections and other measures, the debate seems to have reached a standstill.