‘Student loan borrowers—especially students of color—never fully recovered from that economic punch to the gut…’
(Joshua Paladino, Liberty Headlines) Four Senate Democrats introduced legislation that would freeze student loan payments and grant a minimum $10,000 reduction of all out-standing student loans for the duration of the coronavirus pandemic.
As long as the national emergency declaration remains in effect, the U.S. Department of Education, and thus federal taxpayers, would pay student loans on behalf of borrowers.
“The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens,” Schumer said.
“Our new proposal would immediately cancel monthly payments, and give students and borrowers a minimum $10K student loan payoff,” he continued. “We must act now to help alleviate the growing financial strain on students and families across the country.”
The law would remove penalties from any borrowers who have defaulted on their student loans and become subject to wage garnishment or other forms of debt collection.
“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.
“Student loan borrowers—especially students of color—never fully recovered from that economic punch to the gut,” she claimed. “This time around, by cancelling student debt payments for millions, we will fix the mistake that still holds back a generation of people and dragged down our economy, and create a real, grassroots stimulus to help see us through this crisis.”
Even after the national emergency ends, the bill, if implemented, would grant borrowers a 90-day grace period in which late payments would not come with fees, penalties, or hits to credit scores.
The Democratic student-loan payment plan comes as part of a broader $750 billion stimulus and recovery proposal to lift the United States from the coronavirus pandemic and economic panic.