Student Loan Relief During Covid-19

By: Priscilla Lozano

In August 2019, Trump suspended the process of forgiving the debts owed by veterans suffering with severe disabilities, despite pledging and easy erasal. The loan forgiveness was halted in late October of 2019, for more than 20,000 veterans who qualify. In fact Pence stated, “With the stroke of a pen, the president wiped out $750 million owed by more than 25,000 heroes”, when in reality he’d only assisted 3,300 veterans. This sent many veterans expecting their forgiveness, into disappointment.  According to the Trump Administration, they cannot move forward with the loan forgiveness until they rewrite the regulations for the program. He now faces thousands of enraged veteran groups that stand against Ms. DeVos’s loan-forgiveness policy.


In March, Trump signed the CARES act and passed the law that paused all payment on federal student laws. Alongside this law came a grant that relieved all students of the recession put upon them by Covid-19. The current CARES act student loan forgiveness was originally set to expire on September 30th but is now extended until December 31st. However the Secretary of Education Betsy DeVos has a history of taking actions opposite to the President’s and of Congress. In May, Politico reported how the DOE was garnishing wages from debtors that were in forbearance despite the relief package that protects debtors from garnishments. As she forces the public’s hand in this lawsuit against the garnishments, The Educational Department claims there’s no way to get employers to stop garnishing wages after telling them to do so. With these new wages being garnished there are many struggling to provide for their own families. The complainant states that Elizabeth Barber that the funds the department has illegally garnished are essential for her ability to satisfy her financial obligations during the pandemic, like housing and necessity bills.


One of the DOE’s servicers, Great Lakes Educational Loan Services, on May 6th misreported over 5 million credit reports, causing credit scores to drop as borrowers are inaccurately reported. Credit reports are used by everyone, employers, landlords, and even lawyers. So a mistake much like this can cost a person. The Great Lakes Educational Loan Services have stated that the problem was being addressed and caused little to no harm to borrowers. However, many borrowers disagree saying that being listed with a  “Deferred” status, could possibly harm them.


Most recently, on August 3rd, Congress has introduced another stimulus package called the HEALS act. Sounds great, right? Not quite. The reduced amount does not prove to benefit working families in America. It’s possible that loan repayments will be pushed back even farther. These delays are putting many into debt such as allowing creditors to withhold any loan payments, including federal loans, for unemployed debtors. Republicans in Congress are pushing back against allowing student loan relief to be a part of the stimulus packages, and much rather start with $200 weekly and gradually increase, according to Sens. Schumer, “The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens.” Trump however, states that he will continue suspension of monthly payments and 0 percent interest on all federally-held student loans as a way to assist students, but it’s unclear how many borrowers would count towards this.

Image via Flickr