President Donald Trump speaks during a news conference at the White House, Thursday, July 30, 2020, in Washington. (AP Photo/Evan Vucci) | Evan Vucci/AP Photo
President Donald Trump said Thursday that he is looking at ways to extend the pause on monthly payments for federal student loans, an emergency benefit set to expire at the end of September.
Speaking at the White House, Trump ticked through a list of actions his administration has taken so far to bolster the economy amid the coronavirus pandemic and said he is considering extending the payment freeze that — without action — will end for some 40 million Americans just weeks before the November election.
“We also suspended student loan payments for six months,” the president said. “And we’re looking to do that additionally and for additional periods of time.”
It wasn’t immediately clear if Trump was referring to executive action he would take or whether he would ask Congress to extend the CARES Act student loan relief, which expires Sept. 30.
Key context: A White House spokesperson said last week that Trump is focused on working with Congress on the issue of student loans. An Education Department spokesperson said at the time that that the agency was considering its options on the matter.
Congress has been debating how to address the expiration of benefits as part of the next coronavirus economic aid package. Both Republicans and Democrats have touted the student loan relief to their constituents over the past several months. But it is not yet clear whether lawmakers will come to a bipartisan agreement on the issue.
The GOP stimulus plan Senate Majority Leader Mitch McConnell unveiled earlier this week would allow the benefits to expire. Senate Republicans instead proposed an overhaul of the existing student loan repayment options for federal borrowers.
Democrats have been pushing an extension, for at least another year, of the sweeping reprieve for student loan borrowers.
The $3 trillion stimulus package the House passed in May would extend the suspension of payments for another year while also expanding the relief to millions of loans that are federally backed but privately held. The Democrats’ stimulus bill also calls for keeping the interest rate on student loans at 0 percent for at least another year, with a built-in trigger to automatically continue that benefit until unemployment improves.
Some Democrats are also proposing a more ambitious plan to cancel up to $10,000 of student loan debt per borrower — a policy that has increasingly become a rallying cry in the progressive wing of the party but is a non-starter with most GOP lawmakers.
Trump in March took executive action to suspend interest on federally held student loans. The CARES Act then codified that policy into law and took it a step further, automatically suspending monthly payments.
What’s next: Without further action from Congress or the Trump administration, tens of millions of Americans will have to resume monthly payments on their student loans starting in October. The Education Department is already preparing to send warnings to borrowers about the expiration of the emergency relief. Those notices are expected to start going out as soon as Aug. 15.