WASHINGTON, DC – AUGUST 05: U.S. President Donald Trump speaks during a news conference on August … [+]
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President Trump and his administration confirmed on Friday that he plans on issuing an executive order to address expiring economic relief under the CARES Act, including unemployment insurance and student loan relief for millions of Americans. He provided few specifics about details or timing, but indicated student loan payments and interest would continue to be deferred.
Many questions remain unanswered regarding the extended student loan relief, such as whether collections on defaulted student loans would continue to be suspended, whether the relief would be extended to other types of student loans, or whether the months of suspended payments would continue to qualify borrowers for student loan forgiveness programs like Public Service Loan Forgiveness. The President also did not provide any meaningful details about extended unemployment benefits.
The President’s statement comes as Congress has been unable to reach a compromise on extending student loan relief and other economic assistance programs that are expiring. Congress had suspended all payments, interest, and collections on government-held federal student loans for six months under the CARES Act, which was enacted in April. That student loan relief expires at the end of September.
House Democrats passed legislation extending that relief for an additional 12 months, but Senate Republicans have opposed that measure. Instead, Senate GOP leaders just unveiled a new stimulus package that includes no additional extension of existing student loan relief, but would create a new repayment plan that mirrors income-driven repayment options that are already available to borrowers.
With Congress unable to reach a compromise so far, the Trump administration could act unilaterally and enact a new executive order extending the existing student loan payment suspension and interest freeze. The Trump administration previously exercised this authority in March to temporarily suspend student loan payments and interest at the beginning of the pandemic. With the CARES Act’s provisions expiring on September 30, millions of student loan borrowers will get billed merely days before the November elections. That is a potentially powerful incentive for lawmakers — and the President — to act.
The Trump administration already has a blueprint for such an extension. The HEROES Act, which the House passed in May, extends the existing student loan protections for 12 more months, and would expand those protections to include commercially-owned FFEL-program loans and Perkins loans. In addition, a Republican congressman introduced legislation extending student loan relief through December 31, 2020. While this three-month extension is far shorter than the 12-months suggested by House Democrats, it would get the administration through the election, and effectively punt any further relief to the next Congress.
Further Reading
Student Loan Stimulus: Multi-State Coalition Tells DeVos To Take Action As Compromise Hopes Dim
Second Student Loan Stimulus: Five Possible Scenarios
Here’s what to do if Congress doesn’t extend student loan relief.
Trump: “We’re Looking” At Extending Student Loan Payment Suspension
GOP To Include $1,200 Checks, But No New Student Loan Relief, In Stimulus Bill
Democrats: Freeze All Student Loan Payments, Interest For 12 Months
Over 100 Civil Rights Groups Tell Congress: Cancel Student Debt In Next Stimulus Bill
Rep. Ayanna Pressley: Cancel Student Loan Debt Now
GOP Concerns Over Costs Could Limit Student Loan Relief In Next Stimulus
