House Democrats unveiled a cancellation proposal student loan the debt of millions of student loan borrowers amid the escalating coronavirus crisis.

The bill, called the Emergency Student Debt Relief Act, would do the following:

  • The bill would write off $ 30,000 in federal student loans for borrowers.
  • The student loan forgiveness would be tax free. In other words, debt forgiveness would not be taxed as income.
  • For student loan borrowers who continue to have student loan payments due even after the cancellation of $ 30,000, the government would cover their monthly payments so borrowers can stay on track for cancellation programs. loan or loan repayment.
  • All of the U.S. Department of Education’s involuntary collection efforts – including payroll garnishments, tax refund garnishments, and Social Security compensations – would be suspended.

Representative Ayanna Pressley (D-MA), one of the main sponsors, noted: “During this unprecedented crisis, no one should have to choose between paying off their student loan, putting food on the table or ensuring their safety and that of their family. We must prioritize the cancellation of the debt of the 45 million student borrowers who are struggling to repay their debt in these difficult times. “

Proposal reflects a similar plan proposed by Senate Democrats last week, although the House bill goes further and calls for a greater forgiveness of student loans.

Currently, student loan borrowers affected by the coronavirus crisis have limited options, which include a interest rate freeze and one temporary abstention. But many borrowers are not even eligible for those options right now.

Democrats and Republicans in Congress are negotiating the final terms of a massive stimulus bill to deal with the coronavirus crisis and associated economic collapse. It is not known what relief, if any, will be provided to student loan borrowers under this program.

UPDATE: The Recovery plan adopted by the Senate does not include any student loan discount.

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