In a progressive move, the Trump administration has assured borrowers they will be able to place their student loans under forbearance for 60 days.
The Coronavirus epidemic has brought the United States' economy - like economies across the world - to its knees. With stock markets crashing and people being laid off, this is a difficult financial period for many. Therefore, President Donald Trump has finally initiated a reasonable and logical policy decision. Last week, he announced that he would waive student loan interest for two months. On Friday, the Department of Education provided more details about the emergency relief policy. Those who have borrowed student loans will be able to postpone their federal loan payments without penalty and without accruing interest for at least 60 days, CNN reports.
The relief measure will be enacted retroactively, starting March 13. While the measure is supposed to be temporary and only last two months, the President suggested that it could be extended should the need arise. He stated during a news conference on Friday, "If we need more, we'll extend that period of time." While this is good news for anyone who may be struggling to support their family and repay their loans while confronting financial difficulties, it is not an automatic policy. If you are currently paying off a student loan and would benefit from this measure, you must contact your loan servicer personally and ask them to place your loan in forbearance. This also means that student loans are not being wiped away, rather, installments are simply being postponed.
Requesting to place a loan in forbearance is usually a tedious process. Such an option already exists for those finding it difficult to pay back their loans, but the process may be simplified at this time. Typically, a borrower has to submit several pieces of documentation that display that they meet the eligibility requirements for forbearance. During this public health and economic crisis, the Department of Education has reportedly already directed loan servicers to grant forbearance to pretty much anyone with pending federal student loan payments should they request one. Furthermore, loans placed under forbearance usually accrue interest. In these circumstances, however, the newly-introduced temporary policy will ensure that that does not happen at least for the next 60 days. Trump stated, "Borrowers should contact their lenders, but we've given them very strong instructions."
Meanwhile, several Democrats have suggested that student debt cancellation is the way to go during the Coronavirus epidemic. Lawmakers are currently discussing what should be included in a $1 trillion-plus stimulus plan. Therefore, some Senate Democrats have suggested canceling student loan payments altogether for the duration of the public health emergency. This means the federal government would be paying off borrowers' student debt, essentially wiping at least part of it away for several thousand American citizens. To no one's surprise, this proposal is backed by former Presidential candidate Senator Elizabeth Warren. Joining her are fellow Democrats Senate Minority Leader Chuck Schumer of New York, Washington state's Senator Patty Murray, and Senator Sherrod Brown of Ohio. Without a doubt, this will be a tough idea to float on the Senate floor and an even tougher proposal to protect should it head to the House. Nonetheless, it may just be what America needs while it battles one of the deadliest viruses seen in the recent past.