New stimulus bill could extend student loan relief and unemployment benefits
A bipartisan group in the Senate unveiled a new stimulus bill designed to jump-start efforts to reach a compromise on broad economic relief before the end of the year.
Several critical programs linked to the latest stimulus package are expected to expire in the coming weeks. 12 million Americans will lose their unemployment benefits and rent assistance programs could also run out of funds.
Additionally, critical student loan protections expire after December 31. For much of 2020, millions of student loan borrowers failed to repay their federal student loans due to pandemic emergency relief under the CARES Act, which suspended payments, interest and collections on all federal student loans held by the government. President Trump then extended this relief until the end of the year until December 31 (it was originally scheduled to expire in September).
Democrats have been pushing to further extend improved unemployment benefits, rent assistance and student loan relief until 2021 as part of broader stimulus negotiations. House Democrats have passed a law that would delay the expiration of the student loan moratorium until September 2021. But the Democrat-controlled House and Republican-led Senate have been deadlocked for months.
The $ 908 billion package aims to bridge the gap between the Senate Republicans ‘$ 500 billion proposal and the House Democrats’ $ 2,000 billion proposal. The key provisions are as follows:
- $ 300 per week in enhanced federal unemployment benefits. That’s less than the $ 600 a week pushed by Congressional Democrats, but still represents a critical relief for working people.
- $ 300 billion in funding for small businesses by completing the struggling but popular paycheck protection program.
- $ 25 billion in housing assistance.
- $ 40 billion to help transit agencies struggling with low ridership.
- $ 4 billion for student loans.
Direct cash payments to Americans are not included in the proposal.
The latest push to reach a compromise might give some hope to student loan borrowers, tenants and struggling workers facing holidays and job losses, but the specific details regarding the relief from the student debt have not yet been disclosed. An extension of existing student loan relief would be essential for student loan borrowers, although it is only temporary to bridge the gap between the expiration of the relief after December 31 and the inauguration of Biden later in January.
Under the CARES Act, student loan managers are required to send multiple notifications to student loan borrowers in the coming weeks that their student loans start paying off in January. Borrowers have been advised to start budgeting for payments, apply for or recertify income-based repayment plans, and consider whether to request postponements or abstentions if they have difficulty. Repairers will start generating student loan invoices in the first week or two of January, with anticipated billing due dates later in the month or in early February. A stimulus package that extends student loan relief beyond the December 31 deadline would (at least temporarily) avoid what advocates fear is a disastrous combination of millions of borrowers unable to pay their student loans and providers unable to cope with the high volume of borrowers seeking additional relief under existing programs.