As the novel coronavirus spreads across the country, unemployment numbers are at record highs and people have been struggling to pay for basic necessities like rent and groceries — not to mention the monthly cost of student loans. Millions of borrowers in the United States owe nearly $1.6 trillion in student loan debt, and experts predict that debt might reach $2 trillion by 2021. That’s why the CARES Act — a $2 trillion stimulus package aimed at supporting individuals and companies alike through the financial crisis that was exacerbated by the pandemic — included an automatic suspension of all principal and interest payments on federally held student loans through Sept. 30.
According to a survey from Lend Edu, the help couldn’t come soon enough — 68 percent of respondents who identified as federal student loan borrowers reported that they were unsure if they could make their federal student loan payments before the CARES Act was implemented. Half of them also said they wouldn’t have been able to pay their next federal loan payment in the aftermath of the economic ruin as a result of the COVID-19 pandemic.
And many student loan borrowers were left out of the CARES Act, including anyone who didn’t hold loans held by the U.S. Department of Education. According to the Lend Edu survey, 78 percent of respondents who identified as private student loan borrowers are unsure if they’ll be able to make payments on their private student loan debt.
That’s why a bipartisan team of legislators is trying to pass a new bill — the Equity in Student Loan Relief Act — that could potentially help some of those borrowers. On April 22, Representatives Elise Stefanik (R-NY), Lori Trahan (D-MA), Lloyd Smucker (R-PA), Alma Adams (D-NC), and Susie Lee (D-NV) introduced the bill which calls for temporary student loan relief until the end of September for borrowers who participated in the Federal Family Education Loan program (FFEL). The now-defunct program wasn’t covered in the CARES Act because the loans were not technically from the Department of Education.
“While the CARES Act lifted the weight of student loan payments from millions of Americans whose lives have been disrupted by the COVID-19 crisis, too many borrowers are still being left behind,” Rep. Stefanik said in a statement. “All students who have federal student loans should have their monthly payments suspended, no matter which type of loan they have or when they borrowed the money.”
According to Rep. Adams, 7.2 million borrowers took out loans under the FFEL program, which ended in 2010. If this bill passes, the U.S. Department of Education would cover payments to FFEL lenders through September 30.
“Student loan debt isn’t a partisan issue, but it is a kitchen table issue for many American families,” Rep. Adams said. “It’s important that all borrowers, including people with FFEL loans, get help during the COVID-19 crisis. For decades, our country has made the promise that a college education leads to greater opportunity, and we have to make sure that the burden of student loan debt doesn’t break that promise. This bill brings us one step closer to treating all borrowers fairly and equitably.”
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