Student loan relief extension - COVID-19
Congress passed the CARES Act in the month of April. The massive stimulus package, enacted in response to the growing Coronavirus pandemic outbreak and economic lockdown, provided student loan borrowers with critical relief in the current situation. The CARES Act suspended all payments and interest on government-held federal student loans and stopped all collections activity on government-held defaulted federal loans, as well. The rollout and implementation of the CARES Act’s student loan programs have been problematic, but millions of student loan borrowers nevertheless have benefited until further notice in September. Student Loan Relief with CARES Act was signed to support American workers, businesses, and save jobs for Americans.
The CARES Act’s student loan relief benefit options expire after September 30, 2020, unless Congress passes additional relief in the further notice. This means that over 40 million student loan borrowers may be forced for the loan repayment again by the month of October. However, there are reasons to believe that the CARES Act’s student loan relief provisions could be extended. Multiple Student loan relief programs during COVID-19 are published both by the ED and many private lenders also have release programs in the form of extending forbearance period to support its customers.
Table of contents :
- The economy on stand by - Student loan relief extension
- The pandemic lockdown turns into a knockdown
- New legislation on Student loan relief extension - November
- The HEROES act - Student loan relief extension - COVID 19
The economy on stand by - Student loan relief extension
Unemployment remains at its record highs, even as many states gradually close the lockdown and start reopening their economies. And there is no indication that the economy will be in a substantially better place by October when millions of student loan borrowers will be forced for repayment of their student loans again on their federal student loans. Indeed, the Federal Reserve announced earlier this month that it expects unemployment to remain high through the end of the year, and into 2021 unfortunately.
The pandemic lockdown turns into a knockdown
Despite some announcements from administration officials of the schools' w.r.t student loan relief, Coronavirus cases continue to increase in many states throughout the country, indicating that the pandemic is far from over at the moment. Recently, several states and localities including California, Arizona, and parts of Florida announced new measures to try to contain skyrocketing cases. Hospitalizations are also increasing in several states. The pandemic has not ended, and there is very little evidence available now that the country will be COVID-free by October. Do not fall victim to Student Loan Relief Scams-COVID 19 during the pandemic.
New legislation on Student loan relief extension - November
The presidential election is scheduled for November 3 this year, 2020. But it’s not just the President who is up for reelection, all 435 members of the House of Representatives will be appearing for re-election, as are 35 senator representatives. If the CARES Act’s student loan provisions are allowed to expire, over 40 million student loan borrowers will get billed on their student loans for the first time in six months, merely just days before the election is held. As a result, there may be a broad political appetite in both Congress and the White House to extend the suspension of payments, interest, and collections on federal student loan until after the election, so it is evident that measures will be taken so that voters don’t take out their anger and frustration at the polls.
The HEROES act - Student loan relief extension - COVID 19
Just like the CARES Act, Student loan relief and Heroes Act was introduced to help borrowers who are struggling to repay their student loans. In May 2020, the House of Representatives passed the HEROES Act, a massive second stimulus bill after the CARES act, which extends the CARES Act’s student loan relief provisions by a full year to September 2021. While the GOP Senate leadership rejected the HEROES Act, members recently suggested that they could pass their own new stimulus package sometime in the month of July 2020.
At the same time, Treasury Secretary Steve Mnuchin recently suggested in testimony before Congress that the administration would consider additional stimulus relief, as well. Student loan relief summarizes all the acts published by the ED during the pandemic.
While broad student loan relief in the form of student loan forgiveness and debt cancellation does not currently enjoy bipartisan support, extending temporary student loan relief programs through the end of this year or even into 2021 may be far more palatable, and it could get enough broad support to pass Congress, given the relatively low cost of these measures.