Senate Democrats: Cancel Student Loans Due To Coronavirus

Senate Democrats: Cancel Student Loans Due To Coronavirus

U.S. Senate Democrats have proposed student loan forgiveness due to coronavirus.

Here’s what you need to know.

Student Loans

U.S. Senate Democrats want student loan forgiveness to be at the forefront of helping Americans manage their money during the coronavirus. The new emergency relief proposal would work like this:

  • Suspend student loan payments during the ongoing coronavirus crisis; and
  • forgive $10,000 of student loan debt for every borrower.
  • Suspend garnishment of wages, tax refunds, and Social Security benefits to pay for student loans
  • Suspend all interest capitalization on student loans
  • Expand the president’s student loan interest waiver plan to FFEL Loans, which are not federal student loans issued by the federal government

The proposal, which needs congressional approval, was introduced today by Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Sherrod Brown (D-OH) and Elizabeth Warren (D-MA). The plan would authorize the U.S. Department of Education, which is led by Betsy DeVos, to make monthly student loan payments on behalf of borrowers and forgive a minimum of $10,000 of student loans for all borrowers. The temporary plan, if passed, applies only to federal student loans (not private student loans) and would be tax-free to borrowers. The plan also would institute a 3-month “grace period” during which missed payments will not result in fees or penalties, including negative credit reporting, once the monthly payments and student loan forgiveness cease.

U.S. Senate Democrats have proposed student loan forgiveness due to coronavirus.

Here’s what you need to know.

Student Loans

U.S. Senate Democrats want student loan forgiveness to be at the forefront of helping Americans manage their money during the coronavirus. The new emergency relief proposal would work like this:

  • Suspend student loan payments during the ongoing coronavirus crisis; and
    forgive $10,000 of student loan debt for every borrower.
  • Suspend garnishment of wages, tax refunds, and Social Security benefits to pay for student loans
  • Suspend all interest capitalization on student loans
  • Expand the president’s student loan interest waiver plan to FFEL Loans, which are not federal student loans issued by the federal government

 

The proposal, which needs congressional approval, was introduced today by Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Sherrod Brown (D-OH) and Elizabeth Warren (D-MA). The plan would authorize the U.S. Department of Education, which is led by Betsy DeVos, to make monthly student loan payments on behalf of borrowers and forgive a minimum of $10,000 of student loans for all borrowers. The temporary plan, if passed, applies only to federal student loans (not private student loans) and would be tax-free to borrowers. The plan also would institute a 3-month “grace period” during which missed payments will not result in fees or penalties, including negative credit reporting, once the monthly payments and student loan forgiveness cease.

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