Republicans Prepare New Stimulus Bill Without Student Loan Relief, Unemployment Benefit Cuts

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This article has been updated.

Congress is on vacation after failing to compromise on a new stimulus package. But Republicans are trying to concoct a narrow stimulus proposal for lawmakers to return to Washington in September.

The proposed proposal includes reduced unemployment benefits by $ 300 per week (a reduction from the $ 600 per week in the CARES Act) and no direct stimulus payments to Americans. The proposal also does not include any student loan relief.

Earlier in August, President Trump signed an executive memorandum that purports to temporarily extend student loan relief for millions of Americans until December 31, 2020. A suspension of planned student loan payments, interest and collections by law CARES was to expire in September. 30.

But key questions regarding the president’s memorandum remain, including whether borrowers in default of their student loans are covered by the suspension, whether the extension is automatic or universal, and whether borrowers on track to benefit from cancellation programs. loans such as Public Service Loan Forgiveness may continue to progress during the extended suspension period. The US Department of Education has not released updated guidelines for borrowers.

Consumer groups criticized the president’s executive memorandum as insufficient. “The president’s action on student debt falls short of what Americans need to stay afloat during this unprecedented health and economic crisis,” the Student Borrower Protection Center said in a statement.

House Democrats passed the HEROES Act in May, which would extend the payment of student loans and the CARES Act interest suspension for an additional 12 months. The HEROES Act would also expand the protections of the CARES Act to include commercially issued FFEL federal student loans, as well as federal Perkins loans, and would offer $ 10,000 in federal and private student loan forgiveness to economically troubled borrowers. . The HEROES Act would also continue to increase unemployment benefits by $ 600 per week and provide additional relief to states, cities and hospitals. House Democrats recently passed a separate bill that would also suspend private student loan payments for 12 months.

Republicans have so far rejected these proposals. House Democrats agreed to compromise on a new stimulus bill earlier in August, slashing the price of the HEROES bill from over $ 3 trillion to around $ 2 trillion, hoping that Republicans could hit them halfway (Republicans had already proposed a new stimulus package costing around $ 1,000 billion). But lawmakers were unable to come to an agreement.

Even if the latest narrow stimulus proposal could garner enough votes to pass the Republican-controlled Senate, the bill would have to pass through the Democratic-controlled House. Democratic leaders in Congress have so far opposed a narrow stimulus bill.

Correction: An earlier version of this article referred to unemployment benefits on a monthly rather than weekly basis.

Further reading

Analysis: Trump’s vague student loan order leaves many unanswered questions

Stimulating student loans: Multi-state coalition calls on DeVos to take action as hopes for compromises dwindle

Second stimulus for student loans: five possible scenarios

Here’s what to do if Congress doesn’t extend student loan relief.

Trump: ‘We are considering’ extending suspension of student loan payments

GOP to include $ 1,200 checks, but no new student loan relief, in stimulus bill

Democrats freeze all student loan payments, interest for 12 months

More than 100 civil rights groups tell Congress: write off student debt in next stimulus bill

Rep. Ayanna Pressley: Cancel Student Loan Debt Now

GOP cost concerns could limit student loan relief in next stimulus

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