President Trump put the brakes on any further stimulus negotiations on Tuesday in a series of tweets.

“Nancy Pelosi is asking for $ 2.4 trillion to bail out poorly managed, high crime Democratic states, money that is in no way related to COVID-19,” the president said. “We made a very generous offer of $ 1.6 trillion and, as usual, it is not negotiating in good faith. I reject their request and look to the future of our country. I have asked my representatives to stop negotiating until after the election when, immediately after I win, we pass a major stimulus bill that focuses on hard-working Americans and small businesses. “

The president’s statement means there may be no more incentives to provide financial assistance to the unemployed, small businesses and especially student loan borrowers in 2020.

House Democrats topped $ 3.4 trillion Act on the HEROES in May, largely on a party line vote. They then backed a lean version of the bill with a total cost closer to $ 2.2 trillion in an attempt to compromise with the Republicans. This bill included another round of $ 1,200 stimulus checks, enhanced federal unemployment benefits of $ 600 per week, and additional funding for the Small Business Relief Paycheck Protection Program.

Both versions of the HEROES Act would also have extended the student loan payment and interest suspension of the CARES Act until September 30, 2021, and expanded those protections to include federal student loans from the FFEL program and Perkins loans. The house has continued to lobby for this extension and the extension of student loan relief, and included it in an updated stimulus proposal released last week. The original HEROES law also provided for a $ 10,000 general student loan exemption for financially troubled borrowers.

Republican Senate leaders have so far rejected many of the House Democrats’ proposals, but negotiations have been ongoing.

Earlier in August, President Trump signed a executive memorandum to temporarily extend student loan relief for millions of Americans until December 31, 2020. But consumer advocates argued that was not enough.

“The president’s action on student debt falls short of what Americans need to stay afloat during this unprecedented health and economic crisis,” the Student Borrower Protection Center said in a precedent declaration. “First, all borrowers deserve relief. This includes the 9 million borrowers with loans that are not covered by the president’s proposal. Second, as we have said before, the suspension of payments will only give a boost to borrowers facing job losses and financial turmoil – including millions in distress before the pandemic. The tens of millions of Americans drowning under the weight of student debt urgently need meaningful relief, not political games. “

Advocates for student loan borrowers have called for a widespread forgiveness of student loans in the next stimulus package. “Until Congress, the President or the United States Department of Education act to cancel student loan debt, deferrals and interest suspensions will only delay the hardships borrowers face when ‘they will resume repaying their student loans after the COVID crisis,’ the National Center for Consumer Law said.

Meanwhile, Senator Elizabeth Warren (D-MA) and Senatorial Minority Leader Chuck Schumer (D-NY) last month introduced a Senate resolution calling on the next president to use executive power to enact a sweeping overturn. student loans.

“America is facing historic and overlapping crises during the coronavirus pandemic,” the Senators wrote in a joint statement. “More than 40 million Americans are crushed by more than $ 1.5 trillion in federal student debt. It is typically hundreds of dollars each month that borrowers spend to pay off their loans in addition to rent or mortgage payments and other costs of living. With over 9 million borrowers in default, student loans have much higher delinquency rates than any other type of household debt. This huge student debt burden keeps people from start a small business or buy a house, and force students to drop out of school before they graduate.

Senators called on the next president to use the executive power granted by the higher education law to write off student loan debt. “Congress, through the Higher Education Act, has already given the President and his Secretary of Education the ability to modify, compromise, waive or release student loans,” wrote the senators. “This authority provides a safety valve for federal student loan programs, letting the secretary use her discretion to write off loans even when they do not meet the eligibility criteria for more specific cancellation programs like the disability release “

Former Vice President Joe Biden, who initially hesitated to approve sweeping student loan relief, has taken more dramatic steps to ease the student loan debt burden in the wake of the pandemic and recent protests for the racial justice. As part of his plan, Biden would write off all federal undergraduate student loan debts for borrowers with annual incomes below $ 125,000 who attended public colleges and universities, as well as historically black colleges and universities (HBCU) and private institutions serving minorities (MSI). Biden also supports the comprehensive $ 10,000 student loan exemption for all borrowers proposed by House Democrats in the HEROES Act. It also expressed support for Senator Warren’s proposal to amend the bankruptcy code to make it easier for student loan debts to be discharged in the event of bankruptcy.


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