President Signs Order Extending Student Loan Forbearance Program

President Trump on Saturday signed a number of executive orders related to the coronavirus pandemic, including one that will extend a forbearance plan on student loans through the end of the year, taking action while Congress continues to debate another stimulus package. The president also indicated that the program will be extended even beyond that, but said a decision will not be made until December.

The president had expressed his wishes to extend the forbearance program earlier this month, even though Senate Republicans were seeking to reinstate student loan payments when the current forbearance program ended on Sept. 30.

“Currently, many Americans remain unemployed due to the COVID-19 pandemic, and many more have accepted lower wages and reduced hours while States and localities continue to impose social distancing measures,” stated the executive order. which was sent to Education Secretary Betsy DeVos. “It is therefore appropriate to extend this policy until such time that the economy has stabilized, schools have re-opened, and the crisis brought on by the COVID-19 pandemic has subsided.”

There does appear to be some confusion about what student loans are covered under the new forbearance order, however. The order signed by the President applies to “student loans held by the Department of Education.” It did not mention anything about the Public Service Loan Forgiveness program. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for example, suspended payments were to be treated as on-time payments for the purposes of loan forgiveness programs, such as the PSLE. The order does not mention whether that benefit should continue after Sept. 30.

The president also signed orders deferring payroll tax obligations, evictions, and unemployment insurance.

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