Money For Airlines And Stimulus Checks, But No New Student Loan Relief

Negotiations between House Democrats and the White House on a new stimulus package continue — and there are some signs indicating that a consensus for a compromise may be forming.

According to the Washington Post, the new stimulus proposal may include the following:

  • Financial assistance to the airline industry, which is facing significant pressure as national and international travel has not rebounded to pre-pandemic levels.
  • Another round of $1,200 stimulus checks, although eligibility would likely be limited to people based on annual income (the details are still being worked out).
  • Re-initiating expired federal enhanced unemployment benefits of $600 per week.
  • Shoring up the Paycheck Protection Program for small business relief.
  • $182 billion for K-12 schools, $39 billion for postsecondary schools, and $57 billion toward childcare.
  • $75 billion for public health initiatives including coronavirus testing.
  • Economic relief for states and cities, although this has been a point of contention in the negotiations.

Not mentioned as part of a potential consensus bill so far has been any further student loan relief. Currently, student loan payments, interest, and collections are suspended on government-held federal student loans, but that relief is scheduled to expire on December 31, just over 90 days from now. Consumer advocates worry that many student loan borrowers will be unable to resume normal monthly payments at that time. At the same time, voluntary temporary relief offered by some commercial federal and private student loan lenders in response to the pandemic is expiring, as well.

House Democrats had passed the $3.4 trillion HEROES Act in May, largely on a party-line vote. The bill would have provided a new round of $1,200 stimulus checks, and continued enhanced unemployment benefits of $600 per week. It would have infused additional cash into public health initiatives and small business relief programs, and provided additional economic relief to states and cities, many of which are dealing with a budget crisis. The HEROES Act would also have extended the CARES Act’s student loan payment and interest suspension to September 30, 2021, expanded those protections to include commercially-issued FFEL-program federal student loans and Perkins loans, and provided $10,000 in federal and private student loan forgiveness to borrowers experiencing economic distress.

Republican senators rejected those proposals, and instead offered their own scaled-down stimulus proposals. The Senate GOP’s most recent bill included reduced federal unemployment benefits of $300 per week, an additional $250 billion infusion into the Paycheck Protection Program to support small businesses, $10 billion for child-care support, and $10 billion to forgive a CARES Act-issued loan to the U.S. Postal Service. The bill also included controversial liability protections for businesses to protect them from lawsuits related to the Coronavirus. Democrats have strongly opposed such a provision. The Republican bill included no stimulus checks, and no additional student loan relief. It was unclear whether Republican senators had enough votes within their own caucus to pass the bill, but bipartisan negotiations then stalled, leaving the bill effectively dead.

Further Reading

Centrist Lawmakers Offer Stimulus Compromise: $1,200 Stimulus Checks, Enhanced Unemployment Benefits, No Student Loan Relief

Senate Stimulus Bill: No Second Stimulus Checks, And 5 Other Takeaways

Borrowers Demand Answers From DeVos Following “Blanket Denials” Of Student Loan Forgiveness

Trump’s Extended Student Loan Relief Will Count Towards Loan Forgiveness, Says Dept. Of Education

Republicans Prepare New Stimulus Bill With No Student Loan Relief, Reduced Unemployment Benefits

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