Getty
Does the next stimulus bill include student loan forgiveness?
Here’s what you need to know.
New Stimulus Bill
Only weeks after the passage of the CARES Act, the House of Representatives passed a $484 billion stimulus bill today. The new stimulus package focuses primarily on funds for small businesses and Coronavirus testing. Unlike the CARES Act - the $2 trillion stimulus package to help provide financial support to Americans in the wake of the COVID-19 pandemic, this new stimulus aid will not result in new stimulus checks. Here’s the breakdown of the $484 billion, also known as the PPP Healthcare Enhancement Act:
- Payment Protection Program (PPP): $310 billion
- Emergency money for health system: $75 billion
- Economic Injury Disaster Loan program: $50 billion
- Testing and contact tracing capabilities: $25 billion
- PPP administrative costs: $12 billion
- Emergency Economic Injury Grant program:$10 billion
- Small Business Administration salaries and expenses: $2 billion
Absent from this list: student loan forgiveness. Unfortunately, student loan forgiveness is not included in this stimulus bill.
Why no student loan forgiveness?
This stimulus bill is focused entirely on helping small businesses and providing funding for testing and contract testing. Why wasn’t student loan forgiveness included? It’s not that House and Senate Democrats haven’t made a big push all year to enact student loan forgiveness.
- Senate Democrats proposed a student loan forgiveness plan that would forgive at least $10,000 of federal student loans for all borrowers.
- Former Vice President Joe Biden called for student loan forgiveness all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for borrowers who earn less than $125,000 per year. Biden also has proposed a $750 billion student loan plan focused on income-driven repayment.
- House Democrats called for $30,000 of student loan forgiveness.
- Sen. Elizabeth Warren proposed a student loan forgiveness plan to cancel student loan debt for 95% of Americans.
- Sen. Bernie Sanders (I-VT) proposed $1.6 trillion of student loan debt forgiveness, which would cancel all federal and private student loans.
Even though student loan forgiveness wasn’t included in the latest stimulus bill doesn’t mean Congress did not help student loan borrowers. Student loan debt relief has been a central component of the CARES Act. Following President Donald Trump’s executive actions on federal student loans for 60 days, the CARES Act provided the following student loan benefits from March 13, 2020 through September 30, 2020:
- Suspension of federal student loan payments;
- 0% interest on your federal student loans; and
- No garnishment of wages, Social Security and tax refunds for student loan debt collection.
Future Stimulus: Student Loan Forgiveness?
The president and members of Congress have signaled interest in future stimulus. There have been several legislative proposals, including a $2,000 a month stimulus check as well as free rent and mortgage payments. So far, student loan forgiveness has not topped the priority list for the next stimulus package. There has been chatter, however, about a potential infrastructure package, fiscal support for state and local governments, additional pay for frontline workers, payroll tax cuts, food aid and more.
Related Resources
- Here’s exactly when you’ll get your stimulus check
- What ‘Payment Status Not Available’ really means
- Here’s everything that’s happened to your student loans in 2 weeks
- No, there’s not a $2,000 a month stimulus check
- How to pay your student loans during Coronavirus
- How to get financial relief for your student loans during Coronavirus
- Full text of the CARES Act
- Do you qualify for a stimulus check?
- How to contact your student loan servicer
- Should you stop paying your student loans during Coronavirus?
- Student loan refinancing rates are incredibly cheap
- 5 ways to lower your student loan payments during Coronavirus
