Federal student loan payments are suspended for six months and unpaid debt collection is frozen as part of coronavirus bailout
Education Secretary Betsy DeVos announced Wednesday that her department will stop garnishing wages and seizing tax returns to repay student loans debt for 60 days as lawmakers prepare to stop federal student loan payments through September.
The $2 trillion economic package in the final stages of drafting on Capitol Hill requires the Education Department to defer student loan payments for six months to help ease the economic burden brought on by the coronavirus.
The legislation ‘requires the Secretary to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This provides relief for over 95 percent of student loan borrowers,’ according to text provided by the Senate Health, Education and Labor Committee.
Education Secretary Betsy DeVos announced her department will stop garnishing wages and seizing tax returns to repay student loans debt
Several states have closed schools for the month and some for the rest of the academic year to help battle the coronavirus
The final text of the stimulus, the largest ever drafted by Congress, is being completed and the Senate is expected to vote on it late Wednesday or early Thursday.
President Donald Trump announced last week that federal student loan holders can get their payments paused for 60 days penalty-free and interest-free as part of economic relief being offered in the wake of the coronavirus.
But the new legislation will extend the time by six months.
‘These are difficult times for many Americans, and we don’t want to do anything that will make it harder for them to make ends meet or create additional stress,’ DeVos said in a statement on the department’s new regulations.
‘Americans counting on their tax refund or Social Security check to make ends meet during this national emergency should receive those funds, and our actions today will make sure they do,’ she added.
DeVos also ordered her department to refund approximately $1.8 billion in offsets to more than 830,000 borrowers.
The Trump administration announced Friday that states can cancel federally required school testing this year to protect students and teachers, a measure that some states had requested as they shut down schools over the coronavirus pandemic.
In announcing the decision to lift testing requirements, Trump said students have already ‘been through a lot’ this year.
‘They’ve been going back-and-forth, schools open, schools not open. It’s been all standardized testing, and you know, we are not going to be enforcing that,’ Trump said. ‘I think probably a lot of the students will be extremely happy.’
President Trump on Friday said that the federal government would allow states to cancel standardized testing this year due to the coronavirus pandemic
The standardized tests span the elementary level through high school and typically begin in April. The above photo is a stock image
New guidance from the Education Department says any state that submits a ‘proper request’ will be granted a testing waiver for the 2019-20 school year. The agency said states can begin canceling tests now if they decide it’s necessary as a safety measure.
DeVos said students need to focus on staying healthy and continuing to learn during closures.
‘Neither students nor teachers need to be focused on high-stakes tests during this difficult time,’ DeVos said.
‘Students are simply too unlikely to be able to perform their best in this environment.’
Some governors had asked DeVos to lift testing requirements as they ordered statewide school closures to curb the spread of the virus.
Many states have closed schools for the rest of the month. Some have announced schools are cancelled for the remainder of the academic year.
The federal government’s Every Student Succeeds Act requires yearly testing to measure students’ progress and to identify any learning gaps among minority students or those from low-income families.
The standardized tests span the elementary level through high school and typically begin in April.
State education leaders applauded the Trump administration’s move, saying they need flexibility as they prioritize the safety of their students, teachers and families.
‘State chiefs strongly believe in the importance of assessments and accountability, but now is the time to focus first on the safety and well-being of all students as educators assist them in weathering and recovering from this national emergency,’ said Carissa Moffat Miller, executive director of the Council of Chief State School Officers.
But some education groups cautioned against any widespread testing waiver, saying states can already apply for individual exemptions under the Every Student Succeeds Act.
In a joint statement, several civil rights and education advocates, including John B. King, a former education secretary under President Barack Obama, said it would be ‘premature to issue blanket national waivers from core components of the law.’
Trump’s decision on student loans goes further than his initial plan to waive interest, but it falls short of requests from some advocacy groups.
The Public Interest Research Group said loan payments should be suspended automatically rather than by request, and the group says the suspension should be guaranteed for the length of the pandemic even if it goes beyond 60 days.
‘While we applaud the president and secretary for offering much-needed relief to Americans in this public health crisis, their proposal to freeze student loans for two months does not go far enough – and could keep already-stressed borrowers in a place of economic uncertainty,’ said Kaitlyn Vitez, higher education campaign director for the organization.
Earlier this week, several states asked Education Secretary Betsy DeVos to waive the requirement for standardized testing after mass school closures due to the coronavirus outbreak
Trump’s directive also requires borrowers to make payments if they want to keep making progress in federal loan forgiveness programs.
Under the Public Service Loan Forgiveness program, for example, certain borrowers can have their debt forgiven after making 120 monthly loan payments.
Some Democrats have said borrowers should get credit toward that goal even if payments are suspended because of the virus. But the department’s guidance says suspended payments won’t count toward forgiveness.
Trump said his administration would extend the 60-day payment suspension if required, and he said there would be further changes to help borrowers.
‘That’s going to make a lot of students happy,’ Trump said of the interest and payment suspensions.
‘And we have more to come on student loans, more good news for the students. But we will do that at a different time.
Trump also said his administration would allow students who borrowed money to pay for college to suspend their payments without penalty for at least 60 days.
Earlier this week, the president announced that he would waive interest on federal student loans ‘until further notice.’
The announcement on Friday is a step up, as it gives borrowers a reprieve from payment for two months.
‘We’ve temporarily waived all interest on federally held student loans,’ Trump told reporters during his daily coronavirus briefing at the White House on Friday.
‘They’ll be very happy to hear that and I’ve instructed them to take that action immediately.’
Trump added: ‘Today, Betsy Devos directed federal lenders to allow borrowers to suspend their student loans and loan payments without penalty for at least the next 60 days, and if we need more we’ll extend that period of time.’
‘Borrowers should contact their lenders, but we’ve given them very strong instructions,’ Trump added.
‘That’s a big thing, that’s going to make a lot of students very happy.’