In his address to Americans about the coronavirus crisis, President Donald Trump announced good news for those who owe federal student loans.
He said during his press conference to “help our students,” he would order all interest waived on federal student loans as Americans seek to overcome the economic impact of coronavirus pandemic. The relief could impact tens of millions of student loan borrowers.
Trump said the fees will be waived “until further notice” as part of an emergency action to help Americans deal with the new coronavirus. The relief package is slated to funnel $50 billion in federal aid to businesses, social service entities and more.
It was unclear how the government would seek to implement the forgiveness. Lawmakers had presented ideas like pausing loan payments or forgiving debt entirely during the crisis, which would have better impact on debt relief, according to the National Association of Student Financial Aid Administrators.
Earlier this month, the Federal Reserve cut interest rates by half a percentage point due to “evolving risks to economic activity” posed by the spread of the new virus. That was the most significant cut since 2008, according to NASFAA. Federal student loans have fixed interest rates, so they are primarily immune to those changes. Concerns continue to mount about borrowers’ ability to repay their loans as more offices close their doors to employees to avoid spreading the infection.
The interest relief will reportedly impact 42 million Americans, according to Politico.
The decision, though uncertain, still garnered sweeping response from student loan borrowers on Twitter.
Some seem to insinuate the relief to college graduates in debt was insignificant.
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