A 3 trillion bill passed on Friday will have provision for student loan forgiveness and suspension of loan interests until September 2021.
Weeks after the CARES act was passed, House Democrats have passed a 3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act HEROES (Act) that will have implications on repayment of student loans.
Student loan provision
The stimulus package, if passed by the Republican-controlled Senate, will look to extend the provisions in the CARES act such as suspending interest on federal student loan repayments until September 2021.
The bill will also extend to privately held student loans, and would forgive up to $10,000 for economically distressed borrowers for both the federal and commercial student loans.
Stimulus bill opposition
The Republicans have, however, ignored the bill and made their position known on what they think of the bill. The Senate Republicans have already indicated it will be dead on arrival in the Senate floor.
As the country reopens, Democrats emphasized the need to consider loan forgiveness due to the economic impact of the lockdown. They argued that many people will need all the support they can get, and the majority of the economically distressed citizens will not have enough money to continue paying the student loans.
They also emphasized the fact that the CARES act did not go far enough especially on the period given for the suspension of interests on student loans.
Persis Yu, staff attorney and director of NCLC’s Student Loan Borrower Assistance Project, emphasized the need for loans forgiveness by stating that lack of forgiveness will leave many without longterm relief.
She continued by highlighting the shattered economy due to the coronavirus pandemic will make it harder for these groups to continue paying for student loans while still pursuing economic recovery.
The 1,800-page HEROES Act, if passed, will also provide relief to state, where $1 trillion will go to local and state governments. The bill also includes $75 billion in mortgage aid and $100 billion for rental assistance.
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