In the latest effort to help American college students in financial distress during the ongoing pandemic, Senate Republicans and Democrats on Thursday released two different student loan relief plans.
The Republican plan, as part of a $1 trillion economic stimulus package, would give U.S. Secretary of Education Betsy DeVos the authority to pause student loan payments, principal and interest, for up to three months. It would also allow her to grant another three months of deferment if necessary, depending on whether President Donald Trump’s national emergency declaration would remain in effect.
The proposed bill also concerns students who have been forced to drop out, as colleges and universities across the country cancelled in-person classes and closed on-campus housing, in response to the pandemic. The affected students would be able to keep any Pell grants or loans they were awarded, and the interruption wouldn’t count toward their lifetime eligibility for federal grants and subsidies.
As for students who are still in school but unable to go to their federal work-study jobs due to workplace closures, they could still be paid, either in a lump sum or in installments similar to a paycheck.
The Senate Democrats, in their plan introduced earlier that day, proposed a different approach to address the problem of student loan borrowers having trouble making regular payments.
Under the plan from 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.), the U.S. Department of Education would make monthly payments on behalf of borrowers for the remainder of the national emergency.
As soon as the emergency is over, the Department would have to send additional payments to the borrowers to make sure everyone had at least $10,000 paid off by the federal government.
“The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens,” Schumer said in a statement. “We must act now to help alleviate the growing financial strain on students and families across the country.”
Senate Majority Leader Mitch McConnell (R-Ky.) told reporters on Friday morning that he wanted leaders of both parties to come to an agreement on the multi-billion-dollar stimulus package by the end of the day, so that the Senate could start the voting process next Monday.
“I task these bipartisan teams to reach agreement by the end of the day today,” said McConnell, reported USA Today. “The secretary of the Treasury has indicated it’s important for us to be on the Senate floor and to pass the measure on Monday.”