Approved by the House of Representatives on Friday, the Health and Economic Recovery Omnibus Emergency Solutions (Heroes) Act proposes a further $3 trillion in stimulus money to help people in the United States deal with the financial effects of the coronavirus pandemic.
Among those to benefit from the Democrat-backed bill – which must now get through the Republican-controlled Senate and appears to be facing an uphill battle to do so – would be those repaying student loans in the States.
Student-loan provisions in Heroes Act
The most notable student loan-repayment measures in the Heroes Act include:
- The widening of the Cares Act suspension of federal-loan interest and repayments to include Perkins loans, and FFEL Program loans not owned by the US Department of Education
- The extension of this suspension by a year, until the end of September 2021
- The cancellation of up to $10,000 in federal and private loans if the borrower is “economically distressed”
You’ll find more detailed summaries of how the Heroes Act would affect those paying back student loans here and here. (Please note, however, that the second was written before the initially broader loan-forgiveness measures were narrowed to include only the “economically distressed”.)
Who counts as “economically distressed”?
To be considered “economically distressed”, a borrower needs to have been in one of the following repayment situations on 12 March 2020:
- They were paying $0 a month as part of an income-based repayment plan
- They were delinquent (90 days past due) or in default (270 days past due) on their student loan
- They had qualified for loan forbearance or deferment