New coronavirus stimulus bill does not include student loan relief—mandatory payments are set to resume in February 2021

Senate Majority Leader Mitch McConnell (R-KY) speaks during a news conference following the weekly meeting with the Senate Republican caucus at the U.S. Capitol on December 15, 2020 in Washington, DC.
Rod Lamkey-Pool/Getty Images

Congress is expected to pass a $900 billion coronavirus relief bill that includes $600 stimulus checks and $300 in enhanced unemployment benefits. Notably missing from the package is the pause of mandatory student loan payments and student loan interest that has become a cornerstone of coronavirus relief policy.

Previous reports indicated that the stimulus package would extend the pause, suggesting that the policy was eliminated during negotiations.

The forthcoming coronavirus relief bill includes "no loan forgiveness and no extension of the payment pause and interest waiver," says student loan expert Mark Kantrowitz. "The previous proposal to extend the payment pause and interest waiver through April 2021 was apparently dropped from the legislation. So Joe Biden may have to use executive action to extend the payment pause and interest waiver soon after he takes office."

"They may have dropped the extension of the payment pause and interest waiver, along with other requests, to try to get the compromise legislation done. It is 5,593 pages long," he adds.

If the pause is not extended, student loan borrowers will be required to resume making payments in February 2021, though it appears unlikely that the country's economy will have fully recovered by then. 

U.S. President Donald Trump signs H.R. 748, the CARES Act in the Oval Office of the White House on March 27, 2020 in Washington, DC.
Erin Schaff | Getty Images

In March, legislators passed the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which put into place a pause on federal student loan payments. 

In August, President Donald Trump signed an executive order to continue the interest-free forbearance through the end of December. 

Later, Education Secretary Betsy DeVos announced that borrowers would not have to resume payments until February.

"The coronavirus pandemic has presented challenges for many students and borrowers, and this temporary pause in payments will help those who have been impacted," DeVos said on December 4th. "The added time also allows Congress to do its job and determine what measures it believes are necessary and appropriate."

Experts say student loan borrowers still are in need of support.

"The CARES Act has helped student loan borrowers for much of this year by allowing them to put a hold on repaying their federal student loans," says Jill Gonzalez, analyst and communications director for personal finance site WalletHub. "The current deadline for this is the end of January. However, the pandemic is clearly far from being over, and its effects on the economy will be felt for many years to come."

"In light of this, it's extremely important that these federal student loan relief policies get an extension, and even that other types of loans are included," Gonzalez says. "Millions of people are still struggling financially, and less than half think that 2021 will be better for their wallets. This will continue as long as unemployment still remains high." 

However, there are steps student loan borrowers can take to prepare for 2021, says Sandy Baum, senior fellow at the Urban Institute.

"The good news is that about 1/3 of borrowers are in income-based repayment plans," she says. "If they can verify their incomes, they will not have to make payments unless their incomes exceed 150% of the poverty line. Other borrowers who feel they can't afford their payments should make every effort to enroll in one of these plans."

Still, "many of the biggest problems will be bureaucratic," says Baum. "Borrowers won't know what to do, how to make their payments, how to claim the protections available to them."

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