Senators Seek Help For Student Loan Borrowers Left Out Of Coronavirus Relief Bill – Forbes
In the latest package of coronavirus relief funding, known as the CARES Act or Phase Three, Congress provided a reprieve to student loan borrowers, but unfortunately many were left out. Now, a set of senators is trying to help.
When Congress passed Phase Three of the coronavirus relief package last month, it suspended federal student loan payments, interest-free, until October. The Department of Education made the suspension retroactive to March 13th, effectively giving federal student loan borrowers relief for 7 months. Borrowers who want to make payments can do so and pay down their balance faster without interest. However, millions of borrowers will not receive those benefits for their loans.
That’s because the CARES Act only applies to federally-held student loans. Many advocates and experts were shocked to see that the CARES Act left out borrowers from the old bank-based system, known as the Federal Family Education Loan (FFEL) program. While some of those loans were purchased by the Department of Education, most of them are held by either commercial lenders or guaranty agencies. According to data from the Department of Education, approximately 7.2 million borrowers have FFEL loans not held by the federal government—totaling nearly $170 billion in debt.