Wyden Supports Bill Canceling Student Loan Payments During Coronavirus Emergency
New Proposal Also Would Provide Immediate, Much-Needed Relief To Federal Student Loan Borrowers Through Minimum $10K In Student Loan Payments
Washington, D.C. — U.S. Sen. Ron Wyden today announced he will support an emergency student loan payment and relief plan that would provide much-needed relief to federal student loan borrowers through immediate cancellation of monthly student loan payments during the national emergency caused by coronavirus.
The proposal would require that Congress authorize the U.S. Department of Education to make monthly student loan payments on behalf of borrowers, equivalent to the amount due for all federal student loan borrowers (including Direct Loans and Federal Family Education Loans) for the duration of the national emergency declaration
s. The proposal would guarantee a minimum $10,000 loan payoff for all federal student loan borrowers.
“Students and families dealing with serious coronavirus health concerns in Oregon and nationwide need immediate and consistent relief from the economic disruptions rippling out from this public health crisis,” said Wyden, ranking member of the Senate Finance Committee. “This proposal provides that urgently-needed support by canceling monthly student loan payments throughout this pandemic, and helping students and borrowers with a minimum of $10,000 in targeted relief.”
The proposal was unveiled earlier this week by Senate Democratic Leader Chuck Schumer (D-NY), Senate Committee on Health, Education, Labor, and Pensions Ranking Member Patty Murray (D-WA), Senate Committee on Banking, Housing, and Urban Development Ranking Member Sherrod Brown (D-OH), and Senator Elizabeth Warren (D-MA).
Students and federal loan borrowers were particularly hard-hit by the last economic crisis and remain under significant financial strain, an issue compounded by the coronavirus outbreak.
According to Donald Trump, the Department of Education will reportedly allow borrowers to suspend payments for only 60 days and temporarily waive interest. The Senate Democrats’ proposal goes further, providing immediate relief to students and borrowers through targeted, sustained financial assistance for, at minimum, $10,000 in payments. Borrowers would receive credit toward forgiveness and loan rehabilitation for payments made by the Department on their behalf, and all payments made by the Department would be tax-free for borrowers. The proposal also suspends all involuntary debt collections and wage garnishment for borrowers who have defaulted while the Department is making payments on borrowers' behalf. Importantly, at the termination of this program, the Department will institute a 90 day “grace period” during which missed payments will not result in fees or penalties, including negative credit reporting.
The proposal is included as part of Senate Democrats’ bold Phase 3 proposal for at least $750 billion to wage war against COVID-19 and the economic crisis facing every American. Senate Democrats’ Phase 3 proposal puts workers and families first while ensuring that necessary resources are delivered to address every corner of the public health crisis, including funds to address burgeoning capacity issues at hospitals, child care and education, and more.
A summary of the emergency student loan payment and relief plan is here.
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