A new proposal would expand student loan relief to those borrowers not previously eligible.
Payments and interest on federally-held student loans are currently suspended until September 30, 2021, thanks to an executive order by President Joe Biden. However, a new proposal in Congress would expand that student loan relief.
Initially, the CARES Act provided a pause on both payments and interest until September 30, 2020. Congress failed to pass a bill that would continue the relief, but President Trump used executive authority twice to extend the relief. It was set to expire on January 31st, but President Joe Biden issued a directive that extended the payment and interest pause until September 30, 2021.
Democratic Congressman Joe Courtney of Connecticut has introduced the COVID-19 Student Loan Relief Extension Act, legislation that would expand the relief provided to student loan borrowers under the CARES Act — both in terms of length of relief and who would benefit.
Congressman Courtney’s bill would make the payment pause for student borrowers last until 30 days after the end of the declared Public Health Emergency. Of course, it is possible that the emergency would be ended by then, but if not, this could provide additional months of relief to millions of student loan borrowers. His proposal would also extend the suspension on interest accrual until “the economy shows signs of recovery.”
But the relief from the CARES Act did not apply to all student loan borrowers. The benefits only applied to those with federally-held student loans, not the commercially-held federal loans issued under the old bank-based system.
Courtney’s legislation would make these borrowers eligible for the relief, helping approximately 8 million student borrowers who were not previously eligible for the relief. Going a step further, his proposal would make them retroactively eligible to when the CARES Act passed.
In a statement, Congressman Courtney applauded President Biden’s order saying, “The freeze on student loan payments and interest has given thousands of Americans a boost over the past ten months, and President Biden wasted no time yesterday in taking the important first step to extend pause to September 30th.” He added that his bill would help Americans “build back as strong as possible.”
This proposal would help the vast majority of student loan borrowers. Still, if Courtney’s bill passes, borrowers with private student loans would not be eligible for this relief.
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