The Republican Party will include $ 1,200 checks, but no new student loans will be made, in the stimulus bill

Republican Senate and Trump administration officials, who are finalizing the details of a new stimulus package, confirmed the following key details over the weekend:

• The bill would include a new round of $ 1,200 stimulus checks to be sent to taxpayers.
• The bill will not include an extension of the enhanced unemployment benefits of $ 600 / week.
• The bill may not include an extension of the student loan provisions of the CARES Act, which suspends all payments, all interest, and all federal student loan collections held by the government. The invoice will also not include any student loan forgiveness.

White House economic adviser Larry Kudlow told CNN on Sunday that the Republican stimulus bill would also include reemployment incentives, withholding bonds and tax credits for small businesses.

The Senate GOP bill will include a proposal by Tennessee Senator Lamar Alexander to simplify the federal student loan payment system. Senator Alexander’s plan would include an income-based repayment option that would allow non-earning student loan borrowers to have no monthly payment obligation, while other borrowers would have to pay 10% of their discretionary income for their loans. student.

However, this proposal is practically identical to the revised Pay What You Earn (PAYE) and Pay What You Earn (REPAYE) payment plans, which already exempt borrowers who earn less than 150% of the poverty limit from any obligation to pay. repayment, and limit other borrowers’ student loan payments to 10% of their discretionary income. The Republican Party stimulus bill, therefore, would not effectively provide new relief for student loans, and would force millions of borrowers to re-enter the payment this fall.

“Senator Alexander’s proposal loses the mark on how we need to support student loan borrowers,” Kyle Southern of Young Invincibles recently said. Higher ed. “While we are seeing record unemployment figures, we also know that many people technically still have jobs, but their hours have been dramatically reduced. It’s not fair to expect them to collect loan payments, even at a lower rate, just because Congress has decided on a new scheme for how payments should be made. ”

Democrats in the House of Representatives passed the HEROES Act in May, which would extend the student loan payment and suspension of interest on the CARES Act for an additional 12 months, and also grant $ 10,000 in forgiveness of federal and private student loans to borrowers experiencing financial difficulties. Republican Senate leaders rejected the HEROES Act without taking a formal vote on it.

As it stands, the student loan provisions of the CARES Act are slated to expire on September 30, 2020, unless Congress or the White House take steps to extend relief. Republican Senate leaders are expected to present their stimulus bill on Monday.

Further reading

Democrats: Freeze all student loan payments, interest for 12 months

More than 100 civil rights groups tell Congress: cancel student debt in upcoming stimulus bill

Rep. Ayanna Pressley: Pay off student loan debt now

Republican Party concerns about costs may limit student loan relief in next stimulus

Biden reaffirms plan to cancel student debt, reduce racial inequality

NAACP and 60 Other Groups Call on Congress to Cancel Student Debt

Now there are five plans to forgive student loans: how do they compare?

Widespread student loan forgiveness is more likely now than ever: here is why