Senate coronavirus rescue bill would suspend student loan payments for up to six months
Payments on federal student loans would be delayed for up to six months without additional interest accruing on their balances under a coronavirus economic rescue plan proposed by Senate Republicans on Thursday.
The bill, called the Coronavirus Aid, Relief, and Economic Security Act, orders the Education Department (ED) to delay payments on federal student loans for three months. The bill also gives the Secretary of Education the ability to extend the payment suspension period for another three months.
Student debtors would not be penalized for missing loan payments during the designated period if they later apply for loan forgiveness programs, nor will interest be charged on loans during the payment suspension.
The provision is the latest attempt by policymakers to relieve pressure on Americans facing financial peril as the coronavirus pandemic derails the U.S. economy. American adults owe a collective $1.5 trillion in student loans, almost all of which are held by ED and collected through payment services such as Navient and NelNet.
President Trump last week announced he would waive interest payments on student loans, though neither ED nor major student loan processors have explained how and when that will be implemented. Navient and NelNet have advised customers that they are working with ED to implement Trump’s order, but have not detailed when it would take effect.
Some Democrats have sought far more ambitious protections for student debtors, including forgiveness for a substantial portion of their outstanding debt.