Coronavirus relief bill stalls after Dems insist on adding student loan forgiveness
As part of phase three of the coronavirus stimulus relief package, Senate Democrats have taken to pushing for student loan cancellations during the crisis.
Once the crisis is over, Democrats want each student to have received at least $10,000 in federal aid.
Democratic Senators Sherrod Brown (Ohio), Patty Murray (Wash.) and Senate Minority Leader Chuck Schumer (N.Y.) have joined Massachusetts Democrats Sen. Elizabeth Warren and Rep. Ayanna Pressley in their “proposal” to “cancel federal student loan payments” as part of the third phase of the coronavirus relief bill currently stalled in the upper chamber of Congress.
Congress proposed $750 billion for phase 3 of the Coronavirus relief bill. The proposal would mandate the Department of Education to make payments on the debt of all “federal student loan borrowers” in times of “national emergency, or public health emergency." It would also systemize President Donald Trump’s temporary waiver of federal student loan interest and include Federal Family Education Loans.
“This suspension of payments will be a new policy distinct from ‘deferment’ and ‘forbearance,’ which are opt-in procedures that do not count toward student loan forgiveness under income-driven repayment (IDR) or Public Service Loan Forgiveness (PSLF),” explains the bill. “During the period of suspending payments, borrowers will receive credit toward forgiveness and loan rehabilitation for payments made by the Department on their behalf. All payments made by the Department will be tax-free for borrowers.”
Additionally, when the pandemic crisis subsides after 90 days, the Department of Education would be required to pay additional money to ensure that each federal borrower receives at least $10,000.
“The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens. Our new proposal would immediately cancel monthly payments, and give students and borrowers a minimum $10K student loan payoff," Schumer said.
In an email to Campus Reform, Press Secretary of Heritage Action for America Noah Weinrich commented on why he says Democrats are proposing various issues in this new relief bill.
"The COVID-19 outbreak is an urgent health and economic crisis, and Americans are hurting. But the best way to help them is by working to improve public health and focus on aiding the Americans most affected by the crisis. The administration already paused student loan interest and put a 60-day stop on payments, which will help borrowers get through the next few months,” Weinrich said.
"Paying off student loans is a terrible and ineffective way to address the crisis -- it's far too broad, and would bail out many borrowers who don't really need it,” Weinrich added. “The Senators pushing this plan have been pushing it for years. They're taking advantage of a crisis to push their liberal policy agenda, and they're willing to spend hundreds of billions of taxpayer dollars to do it. It's Washington politics at its worst."
Director for the Center for Education Policy at the Heritage Foundation Lindsey Burke noted in a Monday article that “cumulatively, Americans hold some $1.6 trillion in outstanding student loan debt today. And because the federal government originates and services nearly 90% of all student loans, American taxpayers–nearly one-third of whom do not hold bachelor’s degrees–remain greatly exposed to this outstanding debt.”
Presidential candidate Joe Biden also endorsed fellow Democrats, tweeting that the government “should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues.”
“Young people and other student debt holders bore the brunt of the last crisis. It shouldn't happen again,” Biden added.
Additionally, we should forgive a minimum of $10,000/person of federal student loans, as proposed by Senator Warren and colleagues. Young people and other student debt holders bore the brunt of the last crisis. It shouldn't happen again.
— Joe Biden (Text Join to 30330) (@JoeBiden) March 22, 2020
Student loan forgiveness is just one of the sticking points for Democrats holding up phase three of the coronavirus relief bill in the senate. As of Monday, after hours of partisan bickering in the senate chamber, lawmakers still had not reached a deal, even as stocks plummeted nearly another 600 points.
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