Payments and interest on most federal student loans have been suspended since March when Congress passed the CARES Act. However, that suspension is about to expire.
Initially, Congress suspended both payments and interest through September 30th. Many at the time thought that Congress would revisit the issue—along with other issues—in future pieces of legislation after later reassessing the pandemic’s impact on the economy and the country writ large.
The pandemic continued and negotiations for more economic relief persisted. House Democrats passed several new stimulus bills that failed to move in the Senate, and their negotiations with the Trump administration were not fruitful. As the September deadline approached with no additional congressional action, President Trump gave student borrowers a welcome bit of relief by using executive authority to extend the payment and student loan suspension through the end of the year.
But with fewer than 50 days left in the year, student borrowers are likely wondering if their student loan relief will be extended into the new year.
Congress could still potentially act in the lame duck session now that the presidential election is over. Several stimulus proposals have been put forth that would extend the suspension into next year. Others would provide student loan forgiveness.
However, none of those bills have gained traction. The Senate and House still seem far apart with Senate Majority Leader Mitch McConnell calling for a slimmer targeted bill and House Speaker Nancy Pelosi calling for a larger relief package. It seems increasingly unlikely that another bill will pass in this Congress.
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That leaves borrowers looking to President Trump to help them once again. But it’s unclear if he will act. The election has passed, and Joe Biden has been declared the President-elect, but President Trump has refused to concede and is pursuing legal battles. His focus appears to be solely on the results of the election, at least based on his tweets.
Without Congressional or Executive branch action, student borrowers should be ready to resume their payments in January. But there is still hope for additional student loan relief next year.
In his campaign, President-elect Biden called for providing $10,000 in student debt cancellation as part of coronavirus relief. He has not made it clear if he will rely on Congress to pass that proposal or attempt it through executive action – something Senator Elizabeth Warren has advocated for, though some have questioned the legal authority to do so.
However, Biden can extend the student loan suspension once in office as President Trump did. But borrowers should still be ready to make payments in January. Even if Biden decides to suspend payments, many borrowers will still have payments due before he is sworn in on January 20th – or whenever he decided to act.