The HEROES Act, a $3 trillion stimulus package passed in a divided Congress this month, but holding many promises to ease the burden of student loan debt. Granted that this bill passed with a slim margin and facing opposition for the majority of Republicans including some Democrats. The moderate Democrats opposed the bill for overreaching while progressive democrats threatened to oppose to the bill if it did not support undocumented immigrants to also receive stimulus checks.
If the HEROES Act passes as the Phase Four of Covid-19 relief, then it could cancel or write down up to $10,000 of federal student loan debt per borrower. As of now, under the CARES Act, required federal student loans payments are supposed to be delayed until Fall of this year. If the HEROES Act were to pass, the deadline for payments would be postponed to September 30, 2021 with zero interest on the debt. The act also seeks to expand the requirements so private borrowers can receive relief. It would also expand upon emergency financial aid grants for students based on need.
The act does not remove time from the public service loan forgiveness program, a 10 year repayment plan for public service workers. However, the program at its 99% rejection rate would already likely not be a widely used source for people to seek student loan forgiveness.
When it comes to stimulus checks, the act seeks to grant parents who list their college student as a dependent (under age 24) would receive $500 per child. Under the CARES Act, a majority of college students under 24 were ineligible for the $1200 stimulus checks. It is unclear whether the HEROES Act will remedy this or leave it as it is. First the bill must make it pass a Republican controlled Senate, and then to the President who has already threatened to veto the bill in its current form if it makes it through Congress. It will likely go through many revisions and amendments, but relief for borrowers should remain a crucial part of the act to reduce the crisis of student loan debt in conjunction with the current pandemic crisis.