July 5, 2020

Second Stimulus Checks And Student Loan Forgiveness Could Be Coming

Second Stimulus Checks And Student Loan Forgiveness Could Be Coming


The economy is still struggling from the fallout from the coronavirus pandemic. While unemployment numbers are looking somewhat better, the number of Covid-19 cases are rising in many states. On top of that, the enhanced unemployment benefits from the CARES Act expires at the end of the month.

Congress will start negotiations soon after the holiday break on the next round of coronavirus relief legislation. They will likely address unemployment benefits and funding for state and local governments, but they might also consider a second round of direct stimulus payments and student loan forgiveness.

The CARES Act provided Americans up to $1,200 in a direct cash payment, phased out as income rose. The House of Representatives passed the HEROES Act in May that would’ve provided another round of checks in the same manner. President Trump told FOX Business that he wanted direct payments to Americans, but bigger than the $1,200. But Senate Republicans have been less than enthusiastic about the idea.

Student loan forgiveness might also be on the table. In March, the CARES Act suspended payments and interest on student loans. Before it passed, many were pussing $10,000 in student loan forgiveness for all student loan borrowers. It didn’t make it into the bill but it is something even Democratic presidential nominee Joe Biden supports. 

The HEROES Act would extend the student loan payment and interest suspension for another year, through September 30, 2021. It originally called for the $10,000 student loan forgiveness for all borrowers, but was scaled back to provide the forgiveness for those student borrowers struggling before the pandemic hit. 

Now, more people are pushing student debt forgiveness of some kind. Recently, Former Obama Education Secretary John King told Congress they should provide some debt cancellation for struggling student borrowers.

President Trump could also be open to the idea. During the 2020 Democratic presidential primary, Trump was said to have been considering some type of student loan forgiveness plan to compete with the plans proposed by Senators Elizabeth Warren and Bernie Sanders. And at the start of the pandemic, he was one of the first to propose a student loan interest and payment suspension.

What happens will be dependent on Senate Majority Leader Mitch McConnell. He’s said he doesn’t support many of these proposals, but is also likely facing pressure from the White House in addition to the House.


Related Readings:

The Economic Stimulus Of Student Debt Cancellation

Obama Education Secretary: Cancel Student Loans In Next Stimulus

Pelosi Proposes $1,200 Stimulus Checks, $10,000 Student Loan Forgiveness, And Money For Colleges

What The Coronavirus Stimulus Means For Your Student Loans


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