WASHINGTON, DC – AUGUST 10: US President Donald Trump agrees to speak at news conference … [+]
On Saturday, President Trump signed an executive memorandum proposing to temporarily extend student loan relief for millions of Americans. Trump issued the memorandum after Congress failed to reach a compromise on extending student loan relief and other expiring economic assistance programs.
Previously, Congress had kept all payments, interest, and collections on federal student loans to government for six months under the CARES Act. That relief for student loans expires at the end of September. Democrats had supported a 12-month extension of the student loan provisions of the CARES Act, an extension of those provisions to cover other types of student loans, and forgiveness of broad loans that cover federal and private student loans for economic hardship lenders. Republicans in the House of Representatives rejected those proposals.
Advocates for student loans dismissed the president’s memorandum as unfortunately insufficient.
“The president’s action on student debt falls short of what Americans need to stay afloat through this unusual health and economic crisis,” the Student Borrower Protection Center said in a statement. “First, all borrowers deserve redemption. This includes the 9 million lenders with loans that are not covered by the president’s proposal. Second, as we have said before, pay breaks will only catch the eye on the road for lenders who lose vacancies and financial turmoil – including millions who were in pain before the pandemic. The tens of millions of Americans drowning under the weight of student debt are urgently needed meaningless, not political games.
Related: Best Private Student Loans of 2020
Other proponents noted that the president’s executive memorandum is vague. “Many questions remain,” the National Center for Consumer Law said in a Tweet. While noting that the memorandum was an ‘important first step’ in granting student loan credit, the center stated that ‘Until Congress, the President, or the U.S. Department of Education act to cancel student loan debt, defer payment and interest rate suspensions will only delay the despair that lenders have to face when repaying their student loans after the COVID crisis. “
Recently, more than 100 civil rights organizations and consumer advocacy groups called on Congress to cancel student debt.
The President’s Memorandum on Student Loans states that a temporary suspension of student loan payments and interest shortfall under the CARES Act that expires after September 30, 2020, can be extended until December 31, 2020. But key questions remain unanswered, including if default lenders on their student loans are treated by the suspension, whether the extension is automatic and universal, and whether lenders are on course for loan forgiveness programs such as public service forgiveness can continue to make progress in the extended cut-off period. The memorandum does not provide clear answers. “This refusal is deeply regrettable,” the National Center for Consumer Law stated in a blog post.
The U.S. Department of Education has not responded to a request for comment.
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