Stimulus Update: Why Current Student Loan Deferment Could Lead to 'Disaster'

When President Donald Trump signed an Executive Order to pause payments on federally-held student loans, many Americans were pleased to learn of the burden being put on hold. That, though, may be more smoke in mirrors as experts are fearing his decision could lead to a "disaster in the making" as implementing this order may have a severe impact on the system.

In his order, Trump paused payments, which were supposed to see the protections expire on Sept. 30 but will now extend until Dec. 31, but experts believe this is only prolonging the problem. Pushing it back to that point, they think it will do more harm than good. In a Yahoo! Finance article, Ben Miller, the vice president for the Center for American Progress, a postsecondary education, said that things most likely won't be back in order by the start of the new year amid the coronavirus pandemic. He notes that having everyone being pushed back until the holiday season is "an implementation disaster in the making." His counter to Trump's plans are pausing payments for an entire year and tying the restart of interests "to positive economic indicators." Since Trump ordered Education Secretary Betsy DeVos to extend the policy, borrowers have quickly begun to see the issues Miller spoke about.

That same Yahoo! Article explained an issue that has popped up about a potential delay when it comes to processing these payments come January. In addition to those future roadblocks, there remains some uncertainty over the executive order issued by Trump. Borrowers are still unsure if the months are being counted towards their loan forgiveness. This will continue to be a hot topic throughout the next few months.

In regards to those who are still in the education system, there remains a clear divide when it comes to what the upcoming school year will look like across the country. With talks of hosting all-virtual classes to in-person learning, Georgia, which has already seen its schools return from summer break, has served as a precursor for what could happen across the nation when students begin to recover. The state has already dealt with schools having to close up due to coronavirus exposure, including one school that went viral for its packed hallways and lack of social distancing. All of this said, both Ivanka Trump and her husband, Jared Kushner, have reiterated that they will "absolutely" be sending their kids back to school despite the health threats.