President Donald Trump announced Friday he’s allowing borrowers with federally held student loans to suspend their payments for the next two months as the nation continues to grapple with the economic impact of the coronavirus.
“These are anxious times, particularly for students and families whose educations, careers, and lives have been disrupted,” said U.S. Education Secretary Betsy DeVos. “Right now, everyone should be focused on staying safe and healthy, not worrying about their student loan balance growing. I commend President Trump for his quick action on this issue, and I hope it provides meaningful help and peace of mind to those in need.”
The federal government estimates it holds about $1.6 trillion in student loan debt.
To request the forbearance, borrowers should contact their loan service provider online or by phone. DeVos has also authorized an automatic suspension of payments for any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent.
Trump recently announced he would order all interest waived on federal student loans. The interest relief will reportedly impact 42 million Americans, according to Politico.
Some organizations said Friday the president’s plan does not go far enough. Several support a plan by Senate Democrats that suspends payments until the federal government’s national emergency has ended. Afterward, borrowers would have a 90-day period where missed payments will not result in fees or penalties, including negative credit reporting.
“Anything less ... will not provide the short and long term economic stimulus that distressed student borrowers so desperately need,” said Alexis Goldstein, senior policy analyst for Americans for Financial Reform.
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