August 6, 2020
Student loan forgiveness is top of mind for 45 million student loan borrowers, but will it really stimulate the economy?
Here’s what you need to know.
Student Loan Forgiveness
Student loan forgiveness has taken center stage in congressional legislation and presidential campaigns alike. A few recent examples:
Heroes Act: The Heroes Act — the $3 trillion stimulus package that House Democrats passed — initially proposed $10,000 of student loan forgiveness for your federal student loans and $10,000 of private student loan forgiveness. However, House Democrats passed the Heroes Act with a weaker provision that would cancel $10,000 of student loan debt only for borrowers who are struggling financially (rather than every student loan borrower).
Joe Biden: Former Vice President Joe Biden reiterated his support for student loan forgiveness and his support to discharge student loans in bankruptcy.
Senate Democrats: Senate Democrats have proposed to cancel $10,000 of student loan debt.
House Democrats: House Democrats, led by Rep. Ilhan Omar (D-MN) and Rep. Ayanna Pressley (D-MA) proposed to cancel $30,000 of student loan debt.
Cancel Student Loan Debt: The COVID-19 Student 5 Loan Relief Act of 2020 would make it easier to cancel both private student loans and federal student loans, and would be available to all Americans impacted by Covid-19.
Coronavirus: The Medical Bankruptcy Fairness Act would allow you to cancel your student loans in bankruptcy and provide relief to student loan borrowers who are struggling to make student loan payments.
Cancel Student Loans Petition: Student Debt Crisis, a leading student loan advocacy not-profit, recently sent Sen. Elizabeth Warren (D-MA) a petition for student loan forgiveness with 1.2 million signatures.
Despite these proposals, Congress has not passed any student loan forgiveness.