The COVID-19, or the novel coronavirus, has caused severe economic fallout that has crippled the lives of Americans around the country. While the Senate has passed a stimulus package with initiatives to help Americans through this outbreak, many feel that the current package does not do enough to curb long-time economic side effects as a result of the massive job loss from the pandemic. Now House Democrats have come together to propose a new way to save the economy from the pandemic’s effects by canceling student loan debt for millions of borrowers.
Many student loan borrowers have been greatly impacted by the coronavirus and are left with no income to pay off their debt. While service providers provide some limited options such as interest rate freezes and temporary forbearance, many are not eligible for various reasons. Depending on how long the quarantine goes, it can have severe consequences on borrowers.
The Student Debt Emergency Relief Act has now been sponsored Rep. Ayanna Pressley and others to address the mounting student debt that has been crippling Americans. “During this unprecedented crisis, no one should have to choose between paying their student loan payment, putting food on the table or keeping themselves and their families safe and healthy,” said Pressley according to Yahoo Finance. “We must prioritize debt cancellation for the 45 million student loan borrowers who are struggling to pay off their debt during this difficult time.”
The bill would cancel $30,000 in federal student loans and how student loan forgiveness to be tax-free, meaning debt cancellation would not be taxed as income. It would also give the government power to assume borrower’s monthly payments so users would have more options to remain on track for their loan payoff in addition to suspending all involuntary collections such as wage garnishments.