Senate Republicans’ economic stimulus package unveiled Thursday includes provisions aimed at shielding students and student loan borrowers from unintended financial consequences during the COVID-19 pandemic.
As student loan borrowers may have more trouble making regular payments, the bill would give Education Secretary Betsy DeVos the ability to defer payments, principal and interest, for three months.
She could defer them for an additional three months if needed, according to a summary issued by the Senate Health, Education, Labor and Pensions Committee.
“The legislation allows students to defer payment on their student loans and to keep their Pell grants and gives the Education Secretary flexibility to waive federal academic testing and accountability rules,” Senate HELP Chairman Lamar Alexander said in a statement.
But the measure doesn’t go as far as Senate Democrats have proposed.
Under a proposal introduced earlier Thursday by Senate Minority Leader Charles E. Schumer, HELP ranking member Patty Murray and other Democrats, the Education Department would make monthly federal student loan payments on behalf of borrowers during the national emergency, guaranteeing all borrowers receive at least $10,000 paid to their accounts.
“The coronavirus outbreak brought with it crushing economic uncertainty, and students and borrowers need targeted, quick relief from payment burdens,” Schumer said in a statement about their plan.
Democrats on the Senate Appropriations Committee criticized the Republican bill in a summary, saying it gave “no assistance” to students and colleges, and to elementary and secondary schools, in the face of closures, the move to online classes and other challenges.
In the GOP bill, DeVos would have a “broad waiver authority” to give schools more flexibility under the Elementary and Secondary Education Act, the Higher Education Act and the Carl D. Perkins Career and Technical Education Act during the national emergency.
Education institutions could also request waivers for more financial flexibility in competitive grant programs to repurpose funds to respond to the coronavirus threat.
The bill also addresses students who have had to drop out of school, as many institutions shutter in-person classes and close on-campus housing during the health crisis. The interrupted term wouldn’t count toward their lifetime eligibility for subsidized loans and Pell Grants, and they would be able to keep any Pell grants or loans they were awarded.
Schools would also be able to continue to dole out funds to students in need of financial aid. Under the bill, they could award students affected by COVID-19 additional funds from the Supplemental Educational Opportunity Grant program, which is aimed at students with exceptional financial need.
And students who are still in school but unable to go to their work-study jobs because their workplace has closed could still receive payments, either in a lump sum or in installments similar to a paycheck.