OREGON — Amid the coronavirus pandemic, U.S. Sen. Ron Wyden announced Friday, March 20 that he will support an emergency student loan payment and relief plan that would provide much-needed relief to federal student loan borrowers throughout the country.
According to a press release from Wyden, the proposal, which would immediately cancel monthly student loan payments during coronavirus crisis, would require that Congress authorize the U.S. Department of Education to make monthly student loan payments on behalf of borrowers.
This would be equivalent to the amount due for all federal student loan borrowers (including Direct Loans and Federal Family Education Loans) for the duration of the emergency declarations.
A minimum $10,000 loan payoff for all federal student loan borrowers would also be guaranteed as part of the proposal.
“Students and families dealing with serious coronavirus health concerns in Oregon and nationwide need immediate and consistent relief from the economic disruptions rippling out from this public health crisis,”said Wyden, ranking member of the Senate Finance Committee in a press release. “This proposal provides that urgently-needed support by canceling monthly student loan payments throughout this pandemic, and helping students and borrowers with a minimum of $10,000 in targeted relief.”
Senate Democratic Leader Chuck Schumer (D-NY), Senate Committee on Health, Education, Labor and Pensions Ranking Member Patty Murray (D-WA), Senate Committee on Banking, Housing and Urban Development Ranking Member Sherrod Brown (D-OH) and Senator Elizabeth Warren (D-MA) unveiled the proposal earlier this week.
In the last economic crisis, students and federal loan borrowers were among the group of people who were most affected.
“According to Donald Trump, the Department of Education will reportedly allow borrowers to suspend payments for only 60 days and temporarily waive interest,” said the press release. “The Senate Democrats’ proposal goes further, providing immediate relief to students and borrowers through targeted, sustained financial assistance for, at minimum, $10,000 in payments.”
Borrowers would receive credit toward forgiveness and loan rehabilitation for payments made by the Department on their behalf and all payments made by the Department would be tax-free for borrowers, said the press release.
All involuntary debt collections would also be suspended as part of the proposal as well as wage garnishment for borrowers who have defaulted while the Department is making payments on borrower’ behalf.
A 90 day “grace period” will be instituted following the termination of the student loan relief program during which missed payments will not result in fees or penalties, including negative credit reporting.
“The proposal is included as part of Senate Democrats’ bold Phase 3 proposal for at least $750 billion to wage war against COVID-19 and the economic crisis facing every American,” said the press release. “Senate Democrats’ Phase 3 proposal puts workers and families first while ensuring that necessary resources are delivered to address every corner of the public health crisis, including funds to address burgeoning capacity issues at hospitals, child care and education, and more.”