Making sense of President Trump's Extended Student Loan Relief
Updated: Nov 9, 2020
President Trump has done many things during his presidency, some tough to understand, others not so much. In the case of student loans he has been steadfast in the desire to have them paid, until recently when he decided he was not, for now. This change in stance isn't because of some change in philosophy, it was a reaction to the COVID crisis that has hit America. While I appreciate what he has done regarding student loan payment the ever-shifting nature of what is happening makes it hard for many of us to keep up. Thank goodness The Saving Dude is reading up and will help you make sense of President Trump's extended student loan relief.
In the most basic sense, you don't have to pay back your loans until 2021. What's also cool is they won't be collecting interest for the rest of the year! This is an extension of a program put in place earlier in the year, though slightly different. Earlier in the year, when the CARES Act was put in to place there were no strings attached to the deferment student loan borrowers were receiving. The extension by President Trump does come with some strings attached though.
While I don't full understand the implications of these new stipulations I have an email out to Adam S. Minsky, Esq. a Senior Contributor with Forbes for additional clarification on what this means from a dollars and cents perspective. What I gather is that those of us with who are volunteering, or in a federally subsidized program where student loans are forgiven as a result of the time you spend within the role, each of these last few months in 2020 will count toward forgiveness.
In my estimation this benefits those who are not within one of those roles more so then those who are not. Why do I believe this? I have a job where I make good money. I get to work from home during these challenging times and there is very little disruption to my daily routine. Let's take those in the peace corps as an example of folks who are impacted by President Trump's extension. At this time they may not be able to serve in the corps and earn money. So their loan amount may not be going down. They don't have an alternative source of income (for many in the corp they are far away from America without a chance to take a side job). Therefore, they can't continue to pay down their loans, like I'm able to, and they are losing valuable months of forgiveness while COVID ravages the US.
If you want to know more head over to the U.S. Department of Education's Federal Student Aid site. You can also find information at the Coronoavirus specific webiste.