US House Speaker Rep. Nancy Pelosi (D-CA) and Senator for Minorities Senator Chuck Schumer … [+]
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Has Congress dropped student loans from the new stimulus package?
Here’s What You Should Know.
Student grants
Congress is nearing completion of a new incentive package that includes $ 600 second incentive vouchers for each individual and child, as well as $ 300 per week in unemployment insurance. For millions of Americans, that’s the good news. (That said, most Americans have wondered why they didn’t get a second stimulus check). However, one thing in particular was missing from a joint press release today from House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY): student grants. Pelosi and Schumer released a press release highlighting the main highlights of the new stimulus package, which Congress has not finalized. Pelosi and Schumer did not mention an extension of the student loan. If student loans are excluded from the last incentive account, here’s what this could mean for your student loans.
The student loan deduction will end on January 31, 2021
In an unexpected move earlier this month, President Donald Trump suspended federal student loan payments for another month until January 31, 2021. This means that the existing student loan exemption from the Cares Act stimulus package will not expire as previously on December 31, 2020. expected. Previously, Trump extended the student loan waiver from September 30 to December 31. Therefore, until January 31, 2021, student loan borrowers can continue to expect the following for their federal student loans:
- No payments: Federal student loan payments have been interrupted.
- Not interested: no new interest will accrue on the balance of your federal student loan.
- No collection: Student loan debt collection from defaulted student loans will be discontinued.
Private Student Loans, FFELP Loans, and Perkins Loans are not eligible for the payment break or other student loan exemption. Through January 31, 2021, student loan borrowers can still pay off their federal student loans if they choose. Two weeks ago, a new stimulus package would have extended student loan relief through April 30, 2021. Other Democrats have proposed suspending federal student loan payments until at least September 30, 2021 or when the Covid-19 pandemic ends. However, that later date has gained less traction in Congress on a twofold basis. If student loans are no longer interrupted, make sure to do these 7 things.
The incentive package does not include student loan forgiveness
As expected, the new stimulus package does not include student loan cancellations. With Republicans in control of the United States Senate, plans to suspend student loans were not expected. Democrats will have to wait for the next congressional term or for President-elect Joe Biden to become president. Democrats in Congress have proposed several plans to cancel student loans, including the most recent attempt to cancel up to $ 50,000 in student loans through an executive order from the president. For advocates of student loan forgiveness on a grand scale, that would be the best hope of canceling student loans, given the balance of power in Congress and the White House.
New Incentive Package: Largest Pell Grants Expansion Ever
According to the joint press release, the new stimulus package will include “the largest increase in Pell Grant recipients in more than a decade.” Pelosi and Schumer say the Pell Grants will impact 500,000 new recipients and “ensure that more than 1.5 million students will now receive the maximum benefit.” Separately, the stimulus package could generate $ 82 billion for colleges and schools.
Next steps
It is possible that Congress will keep the student loan reduction in the final text of the stimulus bill. For example, the exclusion from Pelosi and Schumer’s press release may be a mistake. Therefore, if included in the new incentive, federal student loan payments can be extended through April 2021. If not included, you can expect the student loan exemption from the Cares Act to expire on January 31, 2021, unless extended by Congress through legislation or by the President through executive order.
Pay off student loans
Do you get more deductions for student loans? Congress could extend the student loan waiver beyond January 31, 2021, or wait until the next congressional and presidential terms. In the meantime, have a plan of action for repaying student loans. Here are 3 ways to pay off student loans, all of which are free: