While Congress is currently in recess, Republicans have been trying to piece together a pared-down stimulus package amidst failing negotiations regarding a larger, more expensive plan. Their draft proposal, which has been put together in advance of lawmakers’ return to Washington D.C. in September, calls for a variety of economic relief. However, as Forbes noted, their proposal would not provide any student loan relief.
Republicans’ latest proposal calls for unemployment benefits of $300 per week (a reduction from the $600 that was provided under the CARES Act). As for what it doesn’t cover, their plan does not offer direct stimulus payments to Americans or student loan relief. Interestingly enough, President Donald Trump did address the topic of student loan forbearance in an executive memorandum that he issued in early August. Trump’s memorandum aims to temporarily extend student loan relief for Americans through the end of the year. Under the CARES Act, the government provided a suspension of student loan payments, interest, and collections, but those benefits are due to expire on Sept. 30.
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The president’s memorandum specifically addressed student loan forbearance, as it read, “In light of the national emergency declared on March 13, 2020, the Secretary of Education shall take action pursuant to applicable law to effectuate appropriate waivers of and modifications to the requirements and conditions of economic hardship deferments described in section 455(f)(2)(D) of the Higher Education Act of 1965, as amended, 20 U.S.C. 1087e(f)(2)(D), and 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.”
As Forbes pointed out, there are issues associated with Trump’s move. It’s currently unclear whether borrowers in default on their student loans are covered by this suspension, whether this extension is automatic or universal, and whether borrowers who were on track for loan forgiveness can continue to make progress during this period. Additionally, consumer advocacy groups have spoken out on the president’s executive memorandum, explaining that his memo would not actually be able to help provide Americans with much financial relief. The Student Borrower Protection Center said in a statement, “The President’s action on student debt falls short of what Americans need to stay afloat through this unprecedented health and economic crisis.”
