The Republican stimulus package to address the accelerating COVID-19 pandemic includes several provisions aimed at struggling schools and student loan borrowers, but education associations say it’s far from enough.
“It’s deeply disappointing,” said Jon Fansmith, director of government relations at the American Council on Education, which represents nonprofit colleges and universities. “There’s not a single new dollar for students who need help.”
The stimulus package, unveiled late Thursday, includes provisions designed to shield students and borrowers from financial consequences related to widespread campus closures and job losses, but no new appropriated funds. It focuses largely on delaying loan payments without interest and penalties for up to six months, among other provisions.
Senate Minority Leader Charles E. Schumer, D-N.Y., with Sen. Patty Murray, D-Wash., and other Democrats unveiled their own student aid plan Thursday calling for $10,000 in debt relief, among other steps. They have harshly criticized the Republican bill as inadequate. Negotiations on the bill were ongoing Friday, with senators hoping for a final deal later in the day.
The American Council on Education, along with several other higher education associations, circulated a memo on Thursday urging emergency aid for students and institutions.
"In all honesty, we’ve heard from a bunch of schools…who are looking at the numbers and thinking, ‘we may not be able to stay open,'" Fansmith said.
Matt Owens, vice president for federal relations at the American Association of Universities, said he “absolutely” hopes the final deal will involve more direct funding.
“We are seeking relief in the form of aid to students, and then aid to institutions,” Owens said.
The memo also advocates access to low-cost capital, a fund to help institutions transition to online operations, and temporary flexibility under federal education requirements.
“While we appreciate the attention that the Senate coronavirus relief legislation directs at higher education, the bill is disappointing for its omission of important direct assistance that institutions desperately need to continue some operations,” Mildred Garcia, president of the American Association of State Colleges and Universities, said in a statement.
Owens and Fansmith said their organizations are actively pushing their proposal on Capitol Hill, and hoping members will take up some of the suggestions.
Fansmith is optimistic about a final deal, and said he’s ensuring members of Congress hear from schools about the financial catastrophe COVID-19 could unleash.
“Every member of Congress has at least one college or university in their district,” he said. “They’re not just cultural and educational centers in a community, they’re also employment centers.”
Student loan relief
The Republican proposal has also sparked partisan tensions related to its provisions for student loan relief and waiver authority for the Department of Education.
The plan would allow Education Secretary Betsy Devos to defer student loan payments, principal and interest, for three months — plus three additional months if necessary — and grant her broad waiver authority to give schools more flexibility under the federal laws governing elementary and secondary education, technical schools and colleges and universities.
Ben Miller, vice president for postsecondary education at the left-leaning Center for American Progress, said the current plan to pause payments for six months is the “absolute barest minimum,” and hopes the final version will protect defaulted borrowers at risk of having their wages garnished.
He also criticized the plan’s broad waiver authority.
“I understand the need for flexibility in times of crisis, but letting Betsy DeVos just eliminate any parts of the HEA she requires or states and institutions asked for is far too broad,” he said, referring to federal requirements under the Higher Education Act.
Lindsey Burke, director of the Center for Education Policy at the conservative Heritage Foundation, praised the proposal’s student loan provisions and warned against the sort of broader relief outlined in the Schumer-Murray plan.
“This is smart emergency policy that avoids blanket student loan forgiveness,” she said in a statement. “Large scale student loan forgiveness would be inappropriate and would place an additional burden on those who did not take out loans (which represents the vast majority of taxpayers).”
Senate Democrats have pushed for a more drastic form of student loan relief.
Under the proposal outlined Schumer and Murray, the ranking member on the Senate Health, Education, Labor and Pensions Committee, the Education Department would make monthly federal student loan payments on behalf of borrowers during the coronavirus 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.