President Trump said at his press conference yesterday that his administration is potentially considering extending the current moratorium on federal student loan repayments. “We … have suspended student loan repayments for six months, and we are looking to do so on top of that and for additional periods,” he said. Trump provided no further details.
Congress had suspended all payments, interest and collections on federal student loans held by the government for six months under the CARES Act, which was signed into law in April. This student loan relief expires at the end of September.
House Democrats passed legislation extending that relief for another 12 months, but Senate Republicans opposed the measure. Instead, GOP leaders in the Senate just unveiled a new stimulus package that includes no further expansion of existing student loan relief.
In March, however, before the CARES Act was passed, the Trump administration decreed a temporary emergency interest freeze and suspension of payments on government-held federal student loans. The president did so by executive order following his declaration of a national emergency in response to the coronavirus pandemic. Congress later codified this student loan relief into law when it passed the CARES Act, and it also extended these protections for several more months (until September 30) than had been authorized by the initial presidential decree.
With further student loan relief in doubt after the Senate GOP unveiled its stimulus package, despite the pandemic and ongoing economic devastation, it is possible that if Congress fails to reach a compromise, the The Trump administration could act unilaterally and issue a new executive order extending the suspension of existing student loan payments and freezing interest. With the provisions of the CARES Act expiring on September 30, millions of student borrowers will be charged just days before the November election. It’s a potentially powerful incentive for lawmakers — and the president — to act.
The Trump administration already has a plan for such an extension. The HEROES Act, which the House passed in May, extends existing student loan protections for an additional 12 months and would expand those protections to include FFEL program commercial loans and Perkins loans. Additionally, a Republican congressman introduced legislation extending student loan relief through December 31, 2020. While this three-month extension is far shorter than the 12 months suggested by House Democrats, it does. would allow the administration to pass the election and effectively postpone any further relief to the next Congress.
Meanwhile, talks in Congress continue on a possible compromise stimulus package, but there are, as yet, no signs of real progress.
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