Congress and the Trump administration are currently negotiating the next stimulus package and there … [+]
Congress and the Trump administration are currently negotiating the next stimulus package and there are several options for student loan relief on the table.
Payments and interest on federally-held student loans are currently suspended through September 30, 2020. Some private student loan holders have received similar payment pauses depending on who holds the loan and different state laws, though many have not.
Student borrowers should be attentive to what Congress and the administration settle on, as it could greatly impact their finances. Here are some of the options currently being considered for the next stimulus package.
Let the extension expire and provide income-driven repayment.
Senate Republicans have proposed allowing the extension to expire. Instead, they are offering borrowers a new income-driven repayment plan—similar to existing repayment plans—that would not require borrowers to pay if they had no income.
Extend the student loan payment suspension.
Many others are calling for an extension of the repayment pause. Multiple proposals have been put forth to do so. House Democrats passed a bill in May that would extend the suspension for another year. A House Republican proposed suspending payments, but just through the end of the year.
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Provide student loan forgiveness.
Others have called for student loan forgiveness. Earlier this spring, Senator Elizabeth Warren led a call with other Senate Democrats calling for Congress to make payments for borrowers through the coronavirus emergency and provide a minimum of $10,000 in student loan forgiveness. Former Vice President Joe Biden has adopted that plan for his campaign platform. Some progressives have called for more forgiveness.
As negotiations continue, borrowers should be sure to pay attention. The student loan suspension is set to end next month so if payments resume, borrowers need to be ready and plan ahead.