Donald Trump has announced that the waiver to student loan repayments announced as part of the CARES Act last month may need to be extended. The US President said that the Department of Education would revisit the relief program at a later date.
The Coronavirus Aid, Relief, and Economic Security Act (CARES) allows students to pause repayments and have interest frozen on loans issued by the U.S. Department of Education. The Act, which extended the scope of an earlier executive order, may not have gone far enough according to President Trump.
Student Loan Repayments Already on Hold Until September
The Coronavirus has had an impact on just about every facet of life. Millions of workers face layoffs, the economy is in turmoil, central bankers are scrambling to address the economic fallout, and individual movement is severely restricted around the world.
Among the billions of people impacted in some way are those with student loans. With layoffs and reduced hours becoming more widespread, those contractually obliged to make payments may struggle to continue doing so through no fault of their own.
The CARES Act, introduced to the Senate on March 19, will see loans essentially frozen until September 30, 2020. [National Law Review]
Those making payments each month will have six months of relief from their obligations. Additionally, interest on loans will stop accruing entirely over the same period, along with a host of other aid measures. Those opting to continue making payments remain free to do so.
Debtors May Need More than Six Months Relief, Says Trump
In a recent public address, President Donald Trump announced that the current six-month loan repayment waiver may not have gone far enough. As documented in the tweet below, Trump stated that a new assessment of the economic impact of the coronavirus would be needed later in the year to see if the measures need extending:
In addition, Trump also noted $6 billion worth of emergency Department of Education grant funding. This will reportedly support those students impacted by class cancellations, as well as those struggling to finance extended stays in accommodation. [US Department of Education]
U.S. Secretary of Education, Betsy DeVos, stated the following of the fund: “What’s best for students is at the center of every decision we make. We don’t want unmet financial needs due to the coronavirus to derail their learning.”