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Senate Democrats propose canceling student loan payments during coronavirus

Senate Democrats are proposing canceling federal student loan payments during the coronavirus crisis.

The plan — backed by Senate Minority Leader Charles SchumerChuck SchumerUS national security policy in the 117th Congress and a new administration Voters say Biden should make coronavirus vaccine a priority: poll New York City subway service could be slashed 40 percent, officials warn MORE (D-N.Y.) and Sens. Patty MurrayPatricia (Patty) Lynn MurrayDemocratic anger rises over Trump obstacles to Biden transition DOJ investigation into Epstein deal ends without recommended action The Hill's 12:30 Report: What to know about the Pfizer vaccine announcement MORE (D-Wash.), Sherrod BrownSherrod Campbell BrownOn The Money: Democrats accuse Mnuchin of sabotaging economy in dispute with Fed | Trump administration proposal takes aim at bank pledges to avoid fossil fuel financing | JPMorgan: Economy will shrink in first quarter due to COVID-19 spike Democrats accuse Mnuchin of sabotaging economy in dispute with Fed McSally, staff asked to break up maskless photo op inside Capitol MORE (D-Ohio) and Elizabeth WarrenElizabeth WarrenKamala Harris, Stacey Abrams among nominees for Time magazine's 2020 Person of the Year Mnuchin to put 5B in COVID-19 relief funds beyond successor's reach No, the government cannot seize, break or 'bypass' pharmaceutical patents — even for COVID-19 MORE (D-Mass.) — would require the Department of Education to make payments for federal student loans on behalf of borrowers during a public health emergency, effectively eliminating the need for borrowers to make the payments. 

Once the health crisis is over, the department would make an additional payment to each student loan borrower to make sure that each had received at least $10,000 in federal help during the coronavirus epidemic. 

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“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. 

Democrats argue the proposal is necessary after borrowers were negatively impacted during the 2008 financial crisis. 

“Last time our economy crashed, this country made a devastating mistake: we turned our backs on students and families to bail out the giant banks,” Warren said in a statement. “Student loan borrowers—especially students of color—never fully recovered from that economic punch to the gut."

The proposal is part of the Senate Democrats' $750 billion pitch for the third phase of Congress's coronavirus relief package. In addition to student loans, senators are looking at help for small businesses and workers impacted by the virus, which has upended the economy and sparked fears of massive layoffs.  

It comes after Warren and Rep. Ayanna PressleyAyanna PressleyGOP congresswoman-elect wants to form Republican 'Squad' called 'The Force' Pelosi faces caucus divisions in Biden era Record number of Black women elected to Congress in 2020 MORE (D-Mass.) vowed to push congressional leadership to include student debt cancellation in the next coronavirus relief package.

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“Student loan cancellation has to be part of the next emergency funding package. @SenWarren & I are calling on Senate & House leadership to prioritize this,” Pressley, who served as a co-chairwoman for Warren’s presidential campaign before the Massachusetts senator suspended it, tweeted Tuesday.

Republicans are set to unveil their own stimulus package as soon as Thursday, and after that Schumer and Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellHarris says she has 'not yet' spoken to Pence Kamala Harris, Stacey Abrams among nominees for Time magazine's 2020 Person of the Year Feinstein departure from top post sets stage for Judiciary fight MORE (R-Ky.) are set to sit down to negotiate. 

Trump announced earlier this month that he had waived all federal student loan interest “until further notice” amid the coronavirus outbreak.

“To help our students and their families, I have waived interest on all student loans held by federal government agencies and that will be until further notice,” Trump said. “That’s a big thing for a lot of students who have been left in the middle right now."