Republican Senate and Trump administration officials 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 does not provide for an extension of the extended unemployment benefit of $ 600 per week.
- The bill is unlikely to include an extension of the CARES student loan provisions that suspend all payments, interest, and recoveries on government-held federal student loans. The invoice also does not include the granting of student loans.
White House Economic Advisor Larry Kudlow said CNN on Sunday that the GOP stimulus bill would also include reemployment incentives, loyalty bonuses and tax credits for small businesses.
The Senate’s GOP bill will include: proposal by Tennessee Senator Lamar Alexander to simplify the federal student loan repayment system. Senator Alexander’s plan would include an income-based repayment option that would allow no-income student loan borrowers with no monthly payment obligations, while other borrowers would have to pay 10% of their disposable income for their student loans.
However, this proposal is virtually identical to the Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE) repayment plans, which already exempt borrowers earning less than 150% of the poverty line from any payment obligation and limit other borrowers’ Student Loans Payments equal to 10% of their disposable income. The GOP stimulus bill would therefore effectively not provide any new relief for student loans and would force millions of borrowers to repay again this fall.
“Senator Alexander’s proposal misses the target of how we should support student loan borrowers,” Young Invincibles’ Kyle Southern said recently told Inside Higher Ed. “Even though we are seeing record unemployment rates, we also know that technically many people are still in employment, but their hours have been drastically reduced. It is not fair to expect them to take out loan payments at a lower rate just because Congress passed a new system for how they should pay.
House Democrats passed the HEROES bill in May, which extends the payment and interest suspension of the CARES bill for an additional 12 months and also US $ 10,000 in federal and state funds private student loan Forgiveness for Borrowers in Economic Need. Senate GOP leaders rejected the HEROES Act without going through a formal vote on it.
As things stand, the CARES student loan provisions are expected to expire on September 30, 2020, unless Congress or the White House take action to extend the relief. Senate GOP leaders are expected to present their stimulus package on Monday.