Over the last few months, the pandemic and related economic conditions has made it even harder to pay off student loans. Several Congressional bills, however, contain proposals to help pay off student loan debt.
$25,000 loan forgiveness
Rep. Vicente Gonzalez (D-TX) proposed the Student Loan Relief Bill which, if enacted, would forgive $25,000 of student loan debt and cancel $775.5 billion of this debt. It would only cover federal student loans but would assist 40 million borrowers. Rep. Gonzalez says that $25,000 in forgiveness would provide relief to 70 percent of student loan borrowers in this country.
There are several other forgiveness proposals pending in Congress.
- A measure from Sen. Bernie Sanders (I-VT) would forgive $1.6 trillion of federal and private student loans.
- Senator Elizabeth Warren (D-MA) introduced a bill that would cancel student loan debt for 95 percent of Americans.
- Senate Democrats proposed up to $10,000 of loan forgiveness.
- House Democrats proposed up to $30,000 of forgiveness.
- Senator Warren and Senator Chuck Schumer (D-NY) proposed granting authority to the president to cancel up to $50,000 of debt.
- The proposed Heroes Act would cancel private student loans for borrowers facing Covid-19 financial struggles.
Up to now, Congress has not passed any student loan forgiveness measures. No loan forgiveness legislation is are expected to pass during the remainder of this legislative term.
It is unlikely that Rep. Gonzalez’s bill will become law in 2020. The Senate will still have to pass any bill approved by the House.
It is likely that any loan forgiveness will be no more than $10,000. Most of the measures are restricted to this amount and the Democratic presidential nominee supports $10,000 of forgiveness.
What to do
Waiting for Congress to act is not practical. You can consider other options that do not have fees. These include student loan refinancing, loan consolidation, income-driven repayment plans, and student loan forgiveness.
An attorney may also present other options. In some cases, bankruptcy may be an appropriate way to deal with this debt, especially when it becomes overwhelming.