May 11, 2020

What Are The Coronavirus Student Debt Forgiveness Plans?

What Are The Coronavirus Student Debt Forgiveness Plans?

Congress has passed four different legislative packages to provide relief from the coronavirus. In the discussion around the CARES Act, the biggest of the packages passed, student loan relief became front and center in that conversation. Several policymakers proposed student debt cancellation as part of the bill, but it did not happen. Instead, Congress suspended students loan payments interest-free through September 30th, 2020.

Lawmakers are already discussing a new relief package, and many are pushing for student debt cancellation in it. While Americans wait to see what will be included, they should consider the different proposals already put forth.

Below are the different ideas to address student debt proposed during the coronavirus.

  • Cancel a minimum of $10,000 in student debt. Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Sherrod Brown (D-OH), and Elizabeth Warren (D-MA) proposed a plan to pay student loan payments throughout the coronavirus emergency. The payment amounts would be equal to borrowers’ payment due, but after the emergency the proposal would guarantee a minimum of $10,000 in student debt forgiveness. Presumptive Democratic presidential nominee and former Vice President Joe Biden has endorsed this plan.
  • Cancel at least $20,000 in student debt. Led by Representative Alma Adams (D-NC), a number of House Democrats called for a minimum of $20,000 in student debt forgiveness. Their proposal included other money for higher education, like doubling the Pell Grant to help students enroll in college in the fall.
  • Cancel $30,000 in student debt. House Progressives proposed suspending payments through the emergency and guaranteeing a minimum of $30,000 in student debt forgiveness.
  • Cancel the debt of frontline workers. Several folks have proposed forgiving the student debt of frontline workers. Some have called for the forgiveness of health care workers with hefty graduate debt, while others have proposed some forgiveness of all frontline workers along with a credit for those without degrees to go earn them.
  • Cancel debt of defrauded students. Senator Dick Durbin (D-IL) has proposed cancelling the student debt held by those students who attended the now defunct ITT Tech and Corinthian Colleges, given the investigations and findings of widespread fraud and abuse at those schools.

Outside of these proposals, former presidential candidate and Senator Bernie Sanders (I-VT) proposed cancelling all student debt (though only a one-time cancellation). We still await the next bill and it is unknown if student debt forgiveness will be included in the proposal. However, it’s likely borrowers and activists will still push for such forgiveness.

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