As negotiations over a massive economic stimulus package continues in the Senate, members of “The Squad” have proposed a separate plan to cancel student loan debt.
The legislation, dubbed Student Debt Emergency Relief Act, was co-sponsored by Reps. Ayanna Pressley (D-Mass.) and Ilhan Omar (D-Minn.). It would immediately eliminate at least $30,000 in outstanding student loan debt for each borrower, make all canceled debt tax-free, and require the U.S. Department of Education to make monthly payments on behalf of all borrowers of federal student loans for the remainder of the national emergency.
The bill would also prevent the federal government from seizing the borrowers’ paychecks, withholding their income tax returns, or cancelling their benefits during the national emergency.
“During this unprecedented crisis, no one should have to choose between paying their student loan payment, putting food on the table or keeping themselves and their families safe and healthy,” Pressley said in a statement, adding that her bill is meant to provide relief for workers and families “crushed by the financial and emotional burden of massive student debt.”
The proposal is more expensive than the plan unveiled last week by Senate Democrats. Under the plan introduced by Senate Minority Leader Chuck Schumer (D-N.Y.) and ranking members of the Senate Education Committee, including Sens. Patty Murray (D-Wash.) and Elizabeth Warren (D-Mass.), borrowers would have at least $10,000 of their loans paid off by the Education Department.
By contrast, the Senate Republicans proposed giving U.S. Secretary of Education Betsy DeVos the authority to pause student loan payments, principal and interest, for up to three months. Their plan, which is a part of the $1 trillion stimulus package, would also allow DeVos to grant another three months of deferment if necessary, depending on whether the national emergency declaration remains in effect.
The Trump administration currently allows all borrowers with federal student loans to temporarily stop their regular payments for 60 days, starting March 13, when President Donald Trump declared a national emergency. Their interest rates will also be adjusted to zero during that 60-day period.
As for those who decide to keep making their monthly payments in full, the education department will apply those full payments to their principal balance only, once all student loan interest prior to March 13 have been paid.
“Right now, everyone should be focused on staying safe/healthy, not on their student loan balance growing,” wrote DeVos on Twitter. “I commend President @realDonaldTrump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those who need it most.”