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As the nation waits for answers on a stimulus bill, student loan holders are also teetering on a cliff. The CARES Act, which was passed in March, allowed student loans to be furloughed, or put on pause, until September. That pause button will get un-pushed soon with severe consequences.
Student loan debt is particularly unforgiving. It does not even go away in bankruptcy! Democratic lawmakers want to forgive up to $10,000 in balances with the next stimulus bill as well as defer payments for longer. Republicans, well, we don’t exactly know what they want yet because they have not put an actual bill on the floor! We know they did approve of the CARES loan furloughs though. And we also know that they would not like it if student loans are come due again in mid-October, just days before a national election!
If nothing is done, loans will start back up in September and the Education Department will demand payment from millions of borrowers, many of them out of work due to the pandemic. The department is already preparing to send warnings to borrowers, starting Aug. 15.
Keep in mind that many student loans have monthly payments that are based on a borrower’s current income. If a borrower has no income, the set payments will not be required but interest will still accrue. How does that help someone trying to stay afloat during an international crisis? It doesn’t. So how about the government offer some real help on these predatory loans once and for all now, huh?
