The new stimulus package will not include student loan debt forgiveness, according to leaders in the United States Senate. Lawmakers are working on a bill to provide another stimulus check, unemployment enhancements and protections to businesses, all at a lower price than the previous relief packages. Among the ideas to get cut is the student loan forgiveness measure, according to a report by Forbes.
Senate Majority Leader Mitch McConnell is writing the next stimulus bill himself and intends to unveil it publicly sometime next week. While the exact language of the bill has not been released yet, it will reportedly not include any form of student debt relief. That likely includes the provision in the CARES Act that suspended student loan payments through September. When that measure runs out, it looks like McConnell's bill will not extend it.
Our next economic relief package can boost our economy from the grassroots up, put money directly in the hands of working families, and fight the racial wealth gap.
How? By cancelling student loan debt.https://t.co/LkYYM0gDa0— Elizabeth Warren (@ewarren) July 24, 2020
Back in March, the CARES Act suspended payments and interest on all federal student loan debt. The amount due each month has dropped to zero, and borrowers incur no negative credit or extra interest on their payments. That program is set to continue through September, and McConnell reportedly has no intention of extending it any further.
Several lawmakers have expressed concerns about student loan debt during the coronavirus pandemic, and how it will affect the credit and economic standing of thousands of Americans during this recession. Many have reportedly called for student loan payment suspensions to be extended through December, or even through September of 2021.
Others are even more ambitious — including former Vice President Joe Biden. Along with Sen. Elizabeth Warren, Biden has been calling for $10,000 in student loan debt forgiveness for all borrowers. In the U.S. Congress, some Progressive representatives are calling for $30,000 in forgiveness for each borrower.
Although it sounds like none of this will make its way into McConnell's plan, Republicans do have some alternative ideas for this problem. Sen. Lamar Alexander suggested that his party would push a "new" income-driven repayment plan for student loans. It may be included in McConnell's bill next week, he teased.
The plan Lamar outlined has been widely criticized, however, with borrowers and financial experts saying that it is nothing new compared to what federal student loans and private lenders already offer. McConnell's stimulus bill is expected sometime early this week, leaving Congress and the Senate two weeks at most to negotiate the terms before the Senate leaves on a three-week recess. The $600 unemployment enhancement included in the CARES Act has already expired.