March 19, 2020
Aarthi Swaminathan, Yahoo Finance
In response to the coronavirus, U.S. President Donald Trump has just waived interest on all student loans.
“I am announcing the following emergency actions today: to help our students and their families, I’ve waived interest on all student loans held by federal government agencies and that will be until further notice,” he said during a press conference on Friday.
Experts reacted quickly, and they were divided on the announcement.
“Dealing with interest is an important start and I’m glad they recognized the need for action to help borrowers,” Ben Miller, vice president for postsecondary education at the Center for American Progress, told Yahoo Finance. “But they need to do more to make it easier for borrowers to pause payments, automatically prevent individuals from going delinquent, and immediately stop the seizure of tax refunds, security, and wages for defaulted loans.”
“No one should fall behind on their student debts because of this national crisis,” James Kvaal, former President Obama’s top higher education adviser, told Yahoo Finance. “Waiving interest is welcome, but the key question is whether students and parents can reduce or halt their monthly payments. Pausing payments and stopping punitive loan collections would give immediate relief to students and parents facing economic hardship and uncertainty.”
To be clear, Trump has not yet elaborated on how exactly this will take place, and whether this is for all loans or just for federal student debt, which one expert alluded to.
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