Democratic Sens. Chuck Schumer, Patty Murray, Sherrod Brown, and Elizabeth Warren unveiled an emergency student loan payment and relief plan Thursday morning. It would immediately cancel monthly student loan payments for the duration of the coronavirus emergency and provide a minimum of $10,000 to all federal students loan borrowers toward paying down their debt with the Department of Education assuming debt payments for the duration.
The proposal "requires that Congress authorize the U.S. Department of Education to make monthly student loan payments on behalf of borrowers, equivalent to the amount due for all federal student loan borrowers (including Direct Loans and Federal Family Education Loans (FFEL)) for the duration of the national emergency declarations," guaranteeing a minimum $10,000 loan payoff for every federal student loan borrower, the senators said in an emailed press release. "The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens," Schumer said in the press release. "We must act now to help alleviate the growing financial strain on students and families across the country."
"Last time our economy crashed, this country made a devastating mistake: we turned our backs on students and families to bail out the giant banks," said Sen. Warren. "Student loan borrowers—especially students of color—never fully recovered from that economic punch to the gut. This time around, by cancelling student debt payments for millions, we will fix the mistake that still holds back a generation of people and dragged down our economy, and create a real, grassroots stimulus to help see us through this crisis." Sen. Murray added, "Families and student loan borrowers desperately need our help right now and we’re only just at the beginning of the devastating economic impact of this crisis. […] Our legislation would provide immediate relief for borrowers who are struggling to make payments." Sen. Brown added "students and families should not have to worry that they will go into default on their student loans—they should be worried about keeping themselves and their loved ones safe."
The plan would stop garnishment of wages, tax refunds, and Social Security benefits on defaulted loans immediately, and institute a 90 day "grace period" after the crisis is deemed over during which missed payments will not result in fees or penalties, including negative credit reporting.