A bipartisan group of Senators has released a $908 billion bipartisan stimulus proposal that includes $4 billion for student loans. The proposal is just an outline, without any details.
It is possible that the $4 billion for student loans will cover the cost of a short-term extension of the student loan payment pause and interest waiver. The amount is not enough for any significant amount of student loan forgiveness.
President Trump’s 3-month extension through December 31, 2020 cost a total of $14.644 billion, according to the U.S. Department of Education’s Federal Student Aid Annual Report for FY2020. That works out to be about $160 million per day.
The $4 billion in student loan funding would be enough to cover the cost of a 25-day extension.
That would extend the payment pause and interest waiver until a few days after January 20, 2021, when President-elect Joe Biden will be inaugurated. That will give him enough time to issue an executive order for a longer extension to the payment pause and interest waiver. It may also provide enough time for the new Congress to pass legislation for an extension.