House democrats have proposed a bill to cancel student loan debt amid the coronavirus crisis. They’re calling it the “Student Debt Emergency Relief Act”. Here are the main points of the bill:
- Cancel $30,000 of federal student loan debt for borrowers;
- Student loan forgiveness would be tax free, meaning that $30,000 wouldn’t be taxed as income;
- For those who owe more than $30,000, the gov’t would assume their monthly payments so borrowers can remain on track for loan forgiveness programs or loan payoff;
- Involuntary collection efforts by the US Dept of Education would be suspended (like wage garnishments, tax refund seizures, and offsets of social security).
This plan is similar to a plan recently proposed by the Senate democrats. House Democrat Rep. Ayanna Pressley, one of the lead sponsors, said “During this unprecedented crisis, no one should have to choose between paying their student loan payment, putting food on the table or keeping themselves and their families safe and healthy. We must prioritize debt cancellation for the 45 million student loan borrowers who are struggling to pay off their debt during this difficult time.”