The Senate’s new coronavirus stimulus package would suspend federal student loan payments through the end of September, following President Trump’s recent order to postpone borrower payments for at least the next 60 days.
Under the draft legislation, obtained by Fox News Wednesday, federal student loan payments would be suspended through Sept. 30.
The bill specifies that “interest shall not accrue” on the loans during this period, and that there would be no penalty for student borrowers.
The language comes after proposals from House and Senate Democrats to suspend payments throughout the entirety of the national emergency over COVID-19. Democrats in both chambers had proposed reducing each borrower’s student loan balance by $10,000, a provision that was not included in the draft legislation.
The bill, at this point, has been embraced by the White House and has bipartisan support in the Senate. House Speaker Nancy Pelosi, D-Calif., also signaled her early support for the proposed stimulus package.
Last week, Trump announced that he had suspended federal student loan payments for “at least the next 60 days,” penalty-free and interest-free. That announcement came after Trump, earlier in the week, waived interest on all federal student loans.
Meanwhile, on Wednesday, Education Secretary Betsy DeVos announced that she also directed the Department of Education to halt collection and wage garnishments to provide additional assistance to borrowers, noting that flexibility would last, also, for at least 60 days.
“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 Wednesday. “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.”
DeVos’ move also stops the Treasury from withholding money from defaulted student loan borrower’s federal income tax refunds, Social Security and other federal payments.