Student Loans Remain in Limbo As President, Congress Seek Solution

There appears to be a disconnect between the President and members of Congress about what to do with student loan payments that have been paused since the coronavirus shutdown occurred in March. The President last week proposed extending the forbearance program, which is scheduled to expire on Sept. 30, while Senate Republicans would allow collection activities to resume on Oct. 1.

Without further action or some agreement between Democrats, Republicans, and the White House, tens of millions of individuals will have to start repaying their student loans on Oct. 1, about a month before election day and likely still mired in a recession caused by the COVID-19 pandemic.

“We also suspended student loan payments for six months,” President Trump said last week during a briefing with reporters. “And we’re looking to do that additionally and for additional periods of time.”

When it unveiled the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act last week, Senate Republicans chose not to extend the forbearance plan, opting instead to streamline the repayment system by cutting down the number of repayment plans and allowing borrowers who are not making any money to not have to make any payments on their student loans, a program that is already available to them.

In response to the HEALS Act, Democrats have called for a one-year extension of the student loan forbearance program. A group of 56 consumer advocacy groups wrote a letter to Senate leaders asking them to “provide real relief” to “strengthen borrower protections, not roll them back.”

In advance of the scheduled expiration of the forbearance plan, the Education Department is planning to start sending out notices to borrowers later this month.

Check Also

N.J. AG Sues Navient, Alleging ‘Unconscionable’ and ‘Deceptive’ Practices

The Attorney General of New Jersey yesterday filed a lawsuit against student loan servicing giant …

Leave a Reply

Your email address will not be published.