What You Need to Know About the Proposed Student Debt Relief Act
Democrats have proposed a Student Debt Relief Act that would forgive $30,000 in student loan debt for borrowers during the coronavirus outbreak. This comes just two weeks after President Donald Trump announced student loan interest would be waived during the pandemic.
For the most part, liberals have been pushing for student loan forgiveness. In fact, it is one of Senator Bernie Sanders’ main talking points in his campaign. However, politicians are now saying the coronavirus outbreak and resulting economic downfall may require student debt cancellation to improve the economy.
What is the Student Debt Relief Act?
Of course, no Student Debt Relief Act has been pass… yet. There are about a dozen members of Congress backing the idea though.
“During this public health emergency, no person should have to choose between paying their student loan payment, putting food on the table or keeping themselves and their families safe and healthy,” lawmakers wrote.
More congressmen and women are looking to support this movement, but many of them cannot agree as to how much should be forgiven. Senators Chuck Schumer, Elizabeth Warren, and former vice president Joe Biden have proposed to automatically forgive $10,000 in debt for everyone.
This would mean for someone like me who owes $24,000, my debt would get knocked down to $14,000. That’s a pretty great deal! Others have proposed to forgive even more.
One thing is for sure. There are likely going to be changes to the federal student debt and forgiveness is likely going to extend to more people in the near future.
Other Help Coming
As mentioned, there have already been moves made to lessen the burden on student loan borrowers during the COVID-19 pandemic. First, interest on all federal student loans has been waived for the next 60 days. This is good news for individuals who have to apply for forbearance during this time. You won’t accrue interest while you’re not making payments (like you normally would).
Additionally, Congress has approved a stimulus for the coronavirus outbreak. Because many people are out of work, they are able to apply for these stimulus checks with their 2018 or 2019 tax returns. Each person will receive $1,200 and couples will receive up to $2,400.
Lastly, if you need help paying any of your other bills, you have options. Call your lenders, utility companies, and other businesses you deal with and explain your situation. Most places will work with you on payments right now.