Nut House Passes HEROES Act With Limits On Student Loan Relief - What's Next?

[The Nut Party]

https://www.forbes.com/sites/adamminsky/2020/05/15/house-passes-heroes-
act-with-limits-on-student-loan-relief--whats-next/#7fb97f4f6dea

The U.S. House of Representatives just passed the HEROES Act – a massive,
$3 trillion stimulus bill. The bill is designed to provide broad financial
relief to individuals, businesses, nonprofit organizations, and state and
local governments who have been hit hard by the economic fallout from the
COVID-19 pandemic. Senate leadership has already declared the bill “dead
on arrival,” and the President has promised to veto it.

Student Loan Relief Provided by the HEROES Act
House progressives had originally pushed for $30,000 in across-the-board
student loan forgiveness. The released version of the bill reduced the
forgiveness, but still provided meaningful student loan student relief,
including the following:

$10,000 in federal student loan forgiveness;
$10,000 in private student loan forgiveness;

An extension of the CARES Act suspension of payments, interest, and
collections on government-held federal student loans through September of
2021, and an expansion of those protections to include commercially-held
FFEL-program federal student loans as well as Perkins loans.

A fix to Public Service Loan Forgiveness that would allow payments made on
previously-consolidated federal student loans to potentially count towards
the 120 qualifying monthly payments required for the program.

Push to Limit Student Loan Forgiveness
Democratic House leaders, concerned about the ballooning cost of the bill,
made a last-minute push to amend and limit the student loan forgiveness
provisions of the Act. The amendment restricts eligibility for student
loan forgiveness to those who are “economically distressed.” The Amendment
defines this as someone who, as of March 12, 2020 (just prior to the
national emergency declaration), met one of the following criteria:

They were delinquent or in default on their student loan;

They were in an economic hardship deferment or forbearance on their
student loan;

They were in an income-driven repayment plan with a monthly payment amount
of $0/month.

Consumer advocates expressed disappointment at the reduced student loan
forgiveness benefits. The amendment effectively cuts off millions of
student loan borrowers from the student loan forgiveness provisions,
including those who lost their jobs after March 12, 2020. However, it also
reduces the cost of the bill by at least $250 billion, and still provides
substantial relief to borrowers.

What Else Is In The Bill?
The HEROES Act also includes numerous other economic relief provisions,
including the following:

Additional direct cash payments to households, including $1,200 per
individual earning up to $75,000 per year. Families with dependent
children could receive up to $6,000.

An extension of enhanced unemployment benefits (which is an additional
$600 per week) to January 2021.

Hazard pay for essential workers.
Housing assistance to help renters and homeowners with rent and mortgage
payments.

Debt collection relief.
Direct financial relief to state, local, and tribal governments.
Billions of dollars dedicated to Coronavirus testing and contact tracing
initiatives.

What’s Next?
Now that the bill has passed the House, it will be sent to the Senate. In
order for a bill to become law, it must pass both the House and the
Senate, and then be signed by the President.

Senate leadership has already described the HEROES Act as “dead on
arrival,” before the final version even passed. The Senate is not likely
to return to Washington until sometime in June, so no quick action will be
taken. The President has also indicated that he opposes the House bill.

However, the Democratic House leadership views the passage of this bill as
an important negotiating step in crafting a final stimulus bill that can
win over sufficient votes in both chambers of Congress to become law.